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Vietnam digs deeper into corruption
ASIA TIMES
Andy Soloman, Hanoi, 2nd April 1997
A judge has called for the widening of an investigation
into Vietnam's biggest corruption scandal,
putting a deputy central bank governor and other
prominent Communist Party officials under
scrutiny.
Huynh Lap Thanh, president of the Appeals Court, urged
the People's Chief Prosecutor and the
Interior Ministry to investigate State Bank of Vietnam
Deputy Governor Chu Van Nguyen,
members of the Ho Chi Minh City Communist Party Financial
Commission and other local
government and party officials about their involvement in
the "Tamexco affair" that saw about
US$50 million siphoned from state coffers, the Communist
Party daily Nhan Dan (People)
reported on Tuesday.
At the end of the week-long Tamexco appeal hearing in Ho
Chi Minh City on Monday
afternoon, Thanh upheld death sentences for Pham Huy
Phuoc, former director of Communist
Party-affiliated trading company Tamexco, two other
businessmen and one government official.
The 11 other defendants who were appealing had prison
terms ranging from three years to life
upheld.
Five others, who were jailed for terms ranging from three
years suspended to eight years when
the original hearing finished on January 31, had decided
not to appeal but were present in court.
The court specified previously undisclosed fines. Phuoc
was told to repay US$7.5 million to the
now bankrupt Tamexco. He and Nguyen Duc Lo - former
vice-general director of the Vietnam
Bank for Foreign Trade (Vietcombank), who was jailed for
15 years - were ordered to repay
US$2.2 million to Vietcombank.
Phuoc and another bank official must also compensate
Firstvina, a South Korean-invested joint
venture bank, to the tune of US$10.7 million.
The four ringleaders due to face the firing squad have
seven days to appeal to President Le Duc
Anh for a reprieve.
Newspapers welcomed the new inquiry into the scandal and
analysts said another court hearing
was expected. Thanh Nien newspaper said the sentences
were "just the tip of the iceberg" and
called for a deeper investigation.
"During the trial Pham Huy Phuoc mentioned the names of
some people who received bribes
from him and those people were invited to court [to give
evidence]," said Ho Chi Minh City
spokesman Nguyen Son.
"As we do not have any evidence we cannot make any
accusations but the court has proposed
that the chief prosecutor investigate those people to
make clear their responsibilities."
Aside from Chu Van Nguyen, others to face further
investigation include Le Thi Van, former
vice-chairman of the Ho Chi Minh City People's Committee;
Phan Ngoc Suong, deputy head of
the City Party Branch's Finance and Management
Commission; and Pham Van Hoa, deputy
secretary of the city's Tan Binh District Communist Party
Committee. At least nine other local
government, party and banking officials whom Phuoc
claimed he bribed will also be
investigated.
The affair sent shock waves through the establishment
with the disclosure of graft, greed and
embezzlement reaching to the heart of the government and
party.
The most prominent defendant, Pham Huy Phuoc, was found
guilty of siphoning off US$26
million from Tamexco. He used part of the money to buy a
villa for his mistress and gambled
away tens of thousands of dollars.
Among those jailed were several senior executives from
Vietcombank, the largest state bank,
and other banking officials.
The scandal exposed serious shortcomings and abuses
within Vietnam's nascent banking sector,
with bankers bribed in exchange for large loans.
Vietnamese banks make no provisions for bad loans or
nonperforming debt. With no private
landownership, the question of mortgages and collateral
is a gray area. This often gives bankers
little option but to limit lending to acquaintances.
Banks are struggling under mountains of debt due to the
gradual depreciation of the Vietnamese
dong over the past few months and a downturn in the
property market which has hurt
speculators.
Serious problems came to light last month when the
private VP Bank failed to honor a deferred
letter of credit worth nearly US$3 million for a shipment
of steel from Ssangyong of South
Korea.
Cao Sy Kiem, governor of the State Bank of Vietnam,
acknowledged problems. "Some
banking cadres are lacking responsibilities in business
management," he wrote in the current
issue of Tap Chi Cong San (Communism Magazine). "Some are
embezzling, violating
regulations and policies [and] causing losses to the
government and the people."
As the Tamexco appeal trial entered its second day last
week, two prominent private
businessmen were arrested for alleged involvement in a
multimillion-dollar bank loans scam.
Tran Minh Phung, general director of Minh Phung textile
company, and Lien Khui Thin of
Export Import & Tourist Company (EPCO), were charged with
"abusing confidence to
appropriate socialist properties" in a new corruption
investigation involving losses believed to be
worth US$17.4 million.
The two men are alleged to have sold goods that had been
committed as collateral to
Vietcombank. EPCO, which lent the goods to Minh Phung to
secure the loan, is a US$15
million shareholding company that is 40 percent-owned by
district authorities in Ho Chi Minh
City, 25 percent by Vietcombank and the Industrial and
Commercial Bank, and the rest by
private companies and individuals.