Vietnam court jails 46 bankers, execs for multi-million dollar lending scam

A court in Vietnam convicted 46 former bankers and businessmen of corruption on Monday over a multi-million-dollar lending scam spearheaded by the once-powerful chairman of Vietnam’s Construction Bank.

It is the latest in a series of major banking trials aimed at cleaning up the opaque sector long plagued by bad debts, corruption, and nepotism.

Vietnam’s communist leaders have vowed to target the banking business as they wage a sweeping anti-graft campaign which observers say is unprecedented in its scope and scale.

The government said it is weeding out bad actors, while critics say it is also eliminating political foes in the process.

The latest bankers and executives jailed are accused of causing losses of more than $257 million in an elaborate lending scheme involving Vietnam’s Construction Bank (VNCB), according to the official newspaper of the justice department of Ho Chi Minh City.

VNCB’s former head Pham Cong Danh was found guilty of overseeing an illegal lending scheme between VNCB, other allied banks and 29 private companies to which he had ties.

The companies were unable to repay the money and VNCB was eventually sold to the central bank for $0 in 2015.

Danh was given 20 years in jail for “deliberate wrongdoings… causing serious consequences”, the newspaper said, while his accomplices were given terms ranging from 10 years in jail to a two-year suspended sentence.

It was the second guilty verdict for Danh, who was convicted in a connected banking corruption trial in 2016. He will now serve a total of 30 years in jail.

The notorious banker spent several years in prison in the 1990s for embezzlement and gained a reputation as a shrewd — and wealthy — businessman during his career in the construction industry before he moved into banking.

He joins scores of bankers, executives and former politicians behind bars in the one-party state that has long had the reputation of being one of Asia’s most corrupt countries.

Despite strong economic growth in recent years it remains graft-prone, ranking 107 out of 180 on Transparency International’s corruption Index — behind Thailand, Indonesia and China.   /vvp