Prosecutors in a southern Vietnamese city Thursday dropped charges of establishing a slush fund against the former director of a state-owned farm because of the contributions made by her and her family to the state.
The Can Tho prosecutor's office had earlier charged Tran Ngoc Suong with setting up an illegal fund of VND9 billion (US$432,000 at current rates) in 2001 at Song Hau Farm, a collective.
Suong had been named a "Labor Hero" by the government in 2000.
The same charges have also been dropped against four former collective officials -- deputy director Truong Hong Nhung, chief accountant Dang The Quoc Hung, cashier Nguyen Van Son, and accountant Hoang Thi Binh.
The police, who began an investigation into alleged wrongdoings at Song Hau in 2008, had also accused Suong of selling state property to pocket VND1.1 billion.
In August 2009 a local court sentenced Suong to eight years in jail. Her subordinates got terms of 18 months' probation to six years .
Suong lodged an appeal against the verdict, saying it was unlawful and unjust.
In November 2009 the Can Tho City People's Court upheld the sentences and also ordered Suong to return VND4.3 billion (US$206,000) to the government.
Suong maintained her innocence, and in April 2010 central prosecutors found procedural violations in the investigation leading to her conviction.
A month later the Supreme People's Court overturned the verdict and ordered a fresh investigation.
In February 2011 the Can Tho police filed fresh embezzlement charges against Suong and her subordinates.
They said Suong was responsible for establishing the illegal fund worth more than VND10 billion and spending VND5 billion out of the fund between 2001 and 2007.
The high-profile case has attracted controversy ever since the investigation began in 2008, with several government leaders weighing in.
Former vice president Nguyen Thi Binh called Suong's prison sentence unjust, adding the fund was actually a welfare fund for the collective.
Other high-ranking officials also spoke in defense of Suong.