Vu Quoc Hao, the former general director of Agribank Financial Leasing Co. (FLKO) No. 2, is sentenced to death for embezzlement by the People's Court of HCMC
A Vietnam court sentenced two former executives to death in a fraud trial, underscoring the government's efforts to clamp down on corporate corruption while cleaning up its banking system.
The People's Court of Ho Chi Minh City sentenced Vu Quoc Hao, the former general director of Agribank Financial Leasing Co. (FLKO) No. 2, to death for embezzlement, Ma Van Nhat, secretary of the court, said in a phone interview. Dang Van Hai, the former chairman of a construction company, was also sentenced to death in the case, he said. Hao, 58, was charged with embezzling almost VND532 billion ($25 million) of state property, according to a statement on the court's website.
Vietnam's government is seeking to curb corporate corruption as it works to restructure a banking system weighed down by Southeast Asia's highest rate of bad debt, and to turn around an economy that grew last year at the slowest pace since 1999. Last year, the central bank governor vowed to crack down on violations by groups of shareholders working against reforms to banks.
"We'll have to wait and see if this has an impact, or if more needs to be done," said Fred Burke, managing director of law firm Baker & McKenzie (Vietnam) Ltd. in Ho Chi Minh City. "The non-performing loan problem Vietnam has today goes back to a lot of very bad governance practices in the banking sector. The government realizes this goes to the very stability of the financial system, and has social impacts beyond that."
Eleven defendants, including Hao and Hai, were charged with embezzlement, mismanagement, abuse of power and fraud, according to the court's website statement. The other defendants received prison sentences ranging from three years to 14 years, Nhat said. Prosecutors said Hao and Hai created 10 fake financial leasing contracts to disperse almost 800 billion dong.
During the trial, Hao said he regretted his violations and hoped the judges would give other defendants lighter sentences, the Tuoi Tre newspaper reported Nov. 13.
Vietnamese courts held 278 corruption trials this year while the state inspectorate has uncovered 80 new fraud cases involving state funds, according to a government report released this week that did not give comparable figures for previous years.