Some 50 bankers are on a 20-day trial that opened earlier this week in Hanoi for alleged graft and mismanagement causing $69 million in losses, as part of the government’s efforts to crack down on corruption.

Ha Van Tham (R). Source: news.zing.vn

Among those accused were Ocean Bank’s former Chairman Ha Van Tham and CEO Nguyen Xuan Son, who were accused of embezzling $2.2 million and abuse of power in appropriating another $8.8 million.

The case was first brought to trial in February, but judges asked police to investigate further and prosecutors pressed for embezzlement charges to be added against the two former leaders. Being convicted of embezzlement carries the possibility of a death sentence.

Another 44 senior Ocean Bank executives were accused of abuse of power or economic mismanagement. Five executives from different companies were also named in the case.

Several female defendants wept when asked by the judge to confirm the identities of their parents and children.

In May 2015, the State Bank of Vietnam (SBV) took over Ocean Bank after the bank reported losses of $445 million and bad debts that accounted for nearly 50 per cent of its total outstanding loans. The bank’s new Chairman said in a statement posted on its website in January that its operation had been “profitable” over the past two years.

The new indictment also brings in four new defendants, including Pham Cong Danh, former Chairman of the Vietnam Construction Bank (VNCB) who is already serving a 30-year jail term after a court last year found him guilty of illegally withdrawing more than VND9 trillion ($404 million).

The investigation found that Tham had approved a VND500 billion ($23.5 million) loan for Danh in 2012 via a real estate firm without properly securing collateral. The Ho Chi Minh City-based company later defaulted on the loan.

Police said Tham and other executives also offered deposit rates above those set by the SBV, causing losses of nearly VND1.6 trillion ($70.4 million). Nearly 700 people benefited from the illegal rates.

Tham, a US-educated banker who was Vietnam’s eighth richest man in 2013 based on stock holdings, had won several national awards for outstanding entrepreneurship before his arrest in October 2014.

Ocean Bank was founded in 1993 with a 20 per cent stake from the Ocean Group conglomerate, which also invests in hospitality, securities, media, and retail. It remains active in real estate and hotels and services and was valued at about $3.5 million last year, according to its website.

Vietnam ranks 113 out of 176 countries in International Transparency’s 2016 corruption index. The Communist Party and the government have stepped up their anti-corruption drive in recent years, with courts sentencing several senior executives to death.

A month ago, former Sacombank executive Tram Be was arrested, accused of breaking regulations in a $400 million graft case that also involved Danh and was the biggest ever fraud case to rock the country’s banking sector.

VN Economic Times