25 bankers jailed for lending to bankrupt company

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Defendants stand trial at the Soc Trang People's Court on August 4, 2015. Photo credit: VnExpress Defendants stand trial at the Soc Trang People's Court on August 4, 2015. Photo credit: VnExpress

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A Soc Trang Province court Monday handed down jail terms of two to seven years to 25 bank executives for illegally lending to a seafood company that went bankrupt after owing more than VND1.6 trillion (US$75 million).
They were convicted for “violating loan regulations at credit organizations” while working at the Soc Trang, Bac Lieu, and Hau Giang province branches of LienVietPostBank, Vietnam Development Bank (VDB), Sacombank, Vietcombank, and An Binh Bank.
They had orchestrated a loan scam to give Phuong Nam Seafood Joint-stock Company nearly VND800 billion (US$36.7 million).
The Soc Trang People’s Court also sentenced the company’s deputy director Trinh Hong Phuong to 12 years and chief accountant Lam Minh Man to 14 years for fraud.
They were also ordered to pay the bank a total of VND392 million.
The court ordered confiscation and sale of the company’s properties and stocks to compensate the five banks VND40 billion.
According to the indictment, between 2008 and 2010, Lam Ngoc Khuan, the chairman and director of Phuong Nam, instructed his subordinates to forge documents to attest to the company's solvency to secure loans worth trillions of dong from the five banks.
The company had been making a loss every year until 2012 when Khuan moved to the US with his family, leaving behind VND1.6 trillion, or more than five times the company's capital, in debts.
The company, once listed among Vietnam's top 10 seafood exporters, had become insolvent due to bad investments.
Khuan and his accomplices pocketed around VND472 billion ($22.1 million) from the scam, investigators said, adding Khuan alone stole VND52 billion.
The rest of the debt accrued because of bad investments.
The Ministry of Public Security has issued an international warrant for Khuan.
In 2013 the Central Anti-Corruption Steering Committee had listed the scam among the 10 most serious corruption cases.

 

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