Ex-officials face charges in Vietnam shipbuilder's massive loss

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Vietnam's highest office of prosecutors on Thursday announced that it has pressed charges against nine former officials of the state-owned shipbuilding corporation Vinashin for causing the loss of more than VND910 billion (US$43.3 million).

Prosecutors said the officials, including Pham Thanh Binh, former board chairman of the corporation that nearly went bankrupt last year after piling up debts of $4.5 billion, were charged with "deliberately acting against state regulations on economic management."

All nine are expected to stand a trial held by the People's Court in the northern city of Hai Phong, prosecutors said without giving details about when the trial will take place.

However, two of the suspects, Ho Ngoc Tung, 53, former director of Vinashin Financial Co., and Giang Kim Dat, 33, former business manager of Vinashin Ocean Shipping Co., have fled the country. Police issued international search warrants in June.

According to prosecutors, 20 others who were involved in the case also have been fined for their violations.

The indictment concluded that while he was at helm of Vinashin, Binh and his subordinates made "critical violations" in many projects.

For example, he ordered the purchase of the high-speed seagoing vessel Hoa Sen (Lotus) Ship at the cost of $87.8 million, but the used, Italian-made ship only operated 39 north-south trips, causing losses of VND470 billion.

The former official also hastily approved the construction of the Song Hong Thermal Power Plant project, which was later suspended for importing out-of-date technologies, causing losses of VND313 billion, prosecutors said.

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Vinashin is undergoing a massive restructuring to pay it debts with support from the government, which continues to reiterate that the group has to clear all of its debt.

Last week, BBC reported that the Dutch-owned Elliott VIN Netherlands BV had filed a lawsuit in a London court against Vinashin and 21 of its Vietnamese subsidiaries.

While the content of the lawsuit will be confidential until the defendants confirm that they are being sued, observers said that it could be about a loan of some $600 million in bonds that Vinashin had borrowed from the UK-based hedge fund Elliott Advisors.

The debt was supposed to be paid back in 10 semi-annual installments until 2015, but Vinashin missed the first principle installment of $60 million on December 20, 2010, according to the BBC report.

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