The HCM City People’s Court yesterday began its trial of Phạm Công Danh, ex-Chairman of the VNCB Board of Directors, for “deliberately violating State regulations on economic management causing severe consequences” at the Việt Nam Construction Bank (VNCB).— VNA/VNS Photo Hoàng Hải

HCM City — The HCM City People’s Court yesterday began its trial of Phạm Công Danh, ex-Chairman of the VNCB Board of Directors, for “deliberately violating State regulations on economic management causing severe consequences” at the Việt Nam Construction Bank (VNCB).

The corruption case had the largest ever recorded economic loss of any preceding corruption case in the country.

This is the third trial against Danh, who is serving 30 years in jail for wrongdoings at VNCB that incurred losses of more than VNĐ9 trillion (US$405 million) and for other breaches at OceanBank.

The 51-year-old, ex-chairman of the VNCB Board of Directors, ex-chairman of the Member’s Board and ex-general director of the Thiên Thanh Group, and his defendants are accused of using VNCB’s money as collateral to take out loans totalling more than VNĐ6.1 trillion ($274 million) at TPBank, Sacombank and BIDV.

The borrowed money, however, was for Danh’s personal use, and he did not repay it.

According to the indictment issued by the Supreme People’s Procuracy, after the State Bank of Việt Nam approved Trust Bank’s restructuring plan, Danh took over the failing bank and renamed it VNCB.

Danh was charged with abusing his post as chairman of the VNCB Board of Directors and chairman of the member’s board of the Thiên Thanh Group by instructing his staff in the group and the bank to commit a range of violations.

From December 2012-March 2014, Danh and his accomplices set up false files and committed various violations of lending regulations of credit institutions.

VNCB was established in May 2014 by Trust Bank which operated for 23 years, with charter capital of VNĐ3 trillion ($135 million).

In mid-2014, the State Bank of Việt Nam (SBV) appointed new officials to VNCB after several former top executives at the bank had been arrested for allegedly violating state regulations.

Apart from VNCB, other commercial banks owned by the SBV were Ocean Bank and GP Bank. The SBV acquired all three banks at zero đồng due to their ailing performances and failure to meet required charter capital increases.

Apart from Phạm Công Danh, Trầm Bê, Sacombank’s ex-deputy chairman of the board of directors, was charged with giving approval to Phan Huy Khang, ex-general director of Sacombank, to Phạm Công Danh to borrow VNĐ1.8 trillion through Danh’s companies.

These Trầm Bê and Phan Huy Khang’s support for Danh is believed to have caused great losses for VNCB. 

There are 46 defendants in the case who were high-level officials of different banks like VNCB, Sacombank and TPBank.

The court also has summoned 127 other people who have related rights and duties, including Trần Quý Thanh, chairman of the Tân Hiệp Phát Group’s Board of Directors; Trần Ngọc Bích - Thanh’s daughter; Hứa Thị Phấn, former high-level advisor of Trust Bank; and Trần Bắc Hà, former BIDV’s chairman of Board of Directors.

Seventy lawyers have been permitted to attend the trial, in which more than 200 people will be summoned as witnesses.

The court trial is scheduled to run until February 7. — VNS