The HCMC Superior People’s Court yesterday handed down a prison sentence of 20 years to Pham Cong Danh, 53, former chairman of Vietnam Construction Bank (VNCB), now known as Construction Bank (CBBank), following an appeal for his economic mismanagement.

Pham Cong Danh (C), former chairman of Vietnam Construction Bank, listens to the verdict at the appeal trial yesterday

After nearly two weeks of appeal hearing and deliberation, the higher court upheld the prison sentences handed down by the HCMC People’s Court to 12 defendants involved in the high-profile graft case which caused a hefty VND6.1 trillion in losses for the bank, according to local media reports.

Following his September 2016 trial, Danh began serving a 30-year sentence for credit and financial violations that caused losses of more than VND9 trillion at VNCB. The new sentence will run concurrently with the existing one, which is the highest level for a prison sentence.

The lower court had made rightful judgments on the violations committed by Danh and other defendants, according to the higher court.

Further, according to the verdicts of the lower court, Danh and his accomplices had falsified documents and committed violations related to the lending regulations of credit institutions from December 2012 to March 2014.

Danh used 29 companies established in his or other people’s names to borrow money from Saigon Thuong Tin Commercial Bank (Sacombank), Tien Phong Bank (TPBank) and Bank for Investment and Development of Vietnam (BIDV). Afterwards, he deposited money from VNCB in these banks as guarantees for the loans to the 29 companies.

This led VNCB to incur losses of more than VND6.1 trillion when these companies failed to pay off their debts.

It was not until early 2015 that the State Bank of Vietnam took over the debt-ridden bank at zero Vietnamese dong to protect the legitimate interests of its depositors, and later renamed it CBBank.

The higher court also concluded that restitution must be paid to address the consequences of the illegal actions and ensure the fulfillment of civil obligations.

After the verdict of the first-instance trial was announced, 14 defendants, six individuals with relevant interests and obligations, and the HCMC Superior People’s Procuracy lodged their appeals.

The higher court rejected Danh’s appeal for revoking more money that he believed to be evidence in the case.

It also dismissed 11 other defendants’ appeals against the prison terms given to them, but accepted those of two defendants, and decided to give each of them a three-year suspended prison sentence, after considering new factors in their favor.

Earlier, the lower court also asked CBBank to return VND4.5 trillion to Danh, as he previously used this money to raise VNCB’s charter capital, but was rejected by the central bank. However, CBBank stated in its appeal that it intended not to return the money.

According to the higher court, Danh raised VND4.5 trillion from various individuals and organizations to increase charter capital for VNCB, so the sum of money actually belonged to Danh.

Furthermore, there was no evidence proving that he had used this money for his personal purposes, so CBBank must be held accountable for the money.

Therefore, the higher court dismissed this appeal and upheld the first-instance trial’s conclusion that CBBank must return over VND4.5 trillion to Danh. Over VND2.3 trillion has been recovered from CBBank as evidence, though the bank only has to return more than VND2.1 trillion to Danh.

The lower court also ordered BIDV to compensate CBBank with over VND1.6 trillion.

However, according to the higher court, the State holds a 95% stake in BIDV, so the decision will have adverse effects on its equitization, thereby doing harm to the State. This is why the higher court decided to overturn the verdict against BIDV.

SGT