VietNamNet Bridge – Pham Cong Danh told the court yesterday that he had transferred VND600 billion (US$27 million) to Hua Thi Phan, a former high-level advisor of Trust Bank, and had used VND500 billion ($22.7 million) to increase registered capital at VNCB.

Pham Cong Danh (right most) and accomplices appeared in court on January 17 during the ongoing trial looking into the most serious banking corruption case in Vietnam. — VNA/VNS Photo Hoang Hai

He said that VND400 billion ($18 million) was spent covering a higher interest rate than normal for certain individuals at Tan Hiep Phat Group, including chairman Tran Qui Thanh and his daughter Tran Ngoc Bich, after he received a VND1.7 trillion ($77 million) loan from TPBank.

According to an indictment issued by the Supreme People’s Procuracy, Phan Thanh Mai, ex-general director of VNCB, and Nguyen Viet Ha, ex-general director of Loc Viet Fund Management Company, agreed that Viet Ha could use Danh’s 11 companies as collateral to borrow money from TPBank and use the money to buy shares in the Thien Thanh Group and Trung Dung Company.

VNCB guaranteed the loan with a deposit in TPBank. After the 11 companies were not able to prove the proper usage of the loan, TPBank took back VNCB’s deposit before the loan’s due date for payments.

Mai also said that he did not know what Pham Cong Danh did with the money from TPBank.

Tram Be, Sacombank’s deputy chairman, has been charged with approving loans worth VND1.8 trillion ($81 million) for Danh’s companies. Be has not been in good health since the beginning of the trial.

Bê told the court he had known Danh for five years before giving the loans and had instructed Phan Huy Khang, then general director of Sacombank, to check the application and documents.

“I considered Danh a representative of a company. The council should not consider my private relationship with him as a factor in the violation of State regulations on economic management," he said.

According to an indictment issued by the Supreme People’s Procuracy, on April 19, 2013, Phan Huy Khang met Pham Cong Danh and Phan Thanh Mai, ex-general director of VNCB; Mai Huu Khuong, ex-member of VNCB’s Board of Directors; and Nguyen Quoc Vien, ex-head of the control board.

Khang instructed Phan Dinh Tue, Sacombank’s ex-deputy general director, to set up a fake financial file about the companies which were borrowing money. No checks were made after the loans were given.  

Six days later, Tram Be quickly approved the loan, and one day later, money was sent to six of Danh’s companies.

Danh used the money to pay debts of his companies and sent VND166 billion ($7.5 million) to his personal account.

A year later, the six companies could not pay the loan back, and Sacombank took the money back from VNCB.

As a result, VNCB lost more than VND1.8 trillion.

The corruption case involves the largest amount of money of any previous corruption case in the country.

The court trial is scheduled to run until February 7. 

Source: VNS