Dinh La Thang tells court the pressure for project progress led to him acting unlawfully.

Mr. Dinh La Thang was in the dock on January 9

The second day of the trial of 22 executives charged over losses totaling hundreds of millions of dollars at the State oil firm PetroVietnam saw a once-rising political star admit to violating rules in appointing one of the group’s construction subsidiaries as the contractor of a thermal power plant.

Dinh La Thang, the first former Politburo member to face trial in decades, told the court that when he was PetroVietnam Chairman he was tasked with directing members to approve its strategic direction, implement Party guidelines and resolutions from the Board of Directors, and sign documents on behalf of the Board.

According to Thang, the government permitted PetroVietnam to provide investment and development services, under which the group was entitled to appoint member companies to the group’s portfolios, including turning the PetroVietnam Construction JSC (PVC), where fugitive Trinh Xuan Thanh was Chairman, into the construction arm of the group.

According to the indictment, PVC was appointed main contractor of the Thai Binh 2 thermal power plant project despite facing financial difficulties, with Thang commanding his subordinates to sign an expeditious engineering, procurement and construction (EPC) contract for PVC and on the same day make an advanced payment of $6.6 million and VND1.3 trillion ($57 million), of which VND1.1 trillion ($48.3 million) was then found to be used for the wrong purposes.

The construction of the power plant began just four days after the contract was signed, which police said violated rules and procedures.

Thang first denied making any command on the advanced payment, but later admitted his decision to pay 10 per cent of the power plant’s construction costs to PVC in advance. “The appointment of PVC as the main contractor of the Thai Binh 2 power plant comes from the guidelines in the strategy of developing PetroVietnam into a multi-disciplinary group by 2025,” he said.

Regarding construction beginning quickly, Thang said that due to its heavy workload, PetroVietnam always directed its member companies to implement projects comprehensively. “Pressured by the need for progress, I was hurried and impatient and acted too drastically, thus violating procedures,” he said.

The trial, which began on January 8, is part of a widespread crackdown on fraud and mismanagement in the energy and banking sectors spearheaded by Party General Secretary Nguyen Phu Trong.

Of the 22 executives on trial, 12 are accused of “violations of State regulations on economic management causing serious consequences”. Eight others are accused of embezzlement and two are accused of both.

Thang is facing 20 years in jail, while Thanh, PVC’s former Chairman and CEO, faces the death penalty for property embezzlement and 20 years in jail for violating State regulations on economic management.

Thang has three lawyers defending him at the trial, while Thanh has five.

Thang was Chairman of PetroVietnam between 2006 and 2011 before his political career took off as Minister of Transport in Prime Minister Nguyen Tan Dung’s cabinet and then Party Chief of Ho Chi Minh City.

He was arrested on December 8 after being voted out of the Politburo, the Party’s decision-making body, which came after being fired as the Party Chief of Ho Chi Minh City in May.

Thang directly appointed Thanh as PVC’s CEO in December 2007, before making many promotion, funding, or recruitment decisions, to boost Thanh’s power and facilitate the company’s operations, investigators said.

He was found responsible for Thanh’s actions at PVC that led to losses worth more than VND119 billion ($5.24 million) at the Thai Binh 2 thermal power plant project and the embezzlement of VND4 billion ($176,000) at the Vung Ang-Quang Trach project.

Last week, Thanh’s family returned VND2 billion ($87,800) of the money he is accused of stealing from the State-owned oil giant, his lawyer said.

Lawyer Le Van Thiep said Thanh’s mother had handed over the money to Hanoi’s Civil Case Enforcement Department under the Ministry of Justice ahead of his trial on January 8. In a petition, the family said that “Thanh had agreed and requested his family to voluntarily return part of the government money that was appropriated.”

Lawyers say the family’s actions may be aimed at helping Thanh escape the death penalty. Vietnam’s revised Penal Code, effective from this month, allows those convicted of embezzlement to avoid the death sentence by returning at least 75 per cent of their ill-gotten gains.

VN Economic Times