State official on the lam after corruption charges

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Ministry of Transport criticized for appointing Vinalines' ex-chairman to head its marine department amid graft accusations


A floating dock manufactured in Russia in 1965 that Vinalines bought in 2007, an investment which has lost of billions of dong. The Ministry of Public Security is hunting Vietnam Marine Department former director Duong Chi Dung involving wrongdoings at the Vietnam Shipping Lines which he chaired from 2005 to February of this year.

The Ministry of Public Security is hunting former Vietnam Marine Department director Duong Chi Dung, who disappeared after an arrest warrant was issued in his name last week.

Investigators suspect the former chairman of the corruption-riddled state-owned shipping company Vietnam Shipping Lines (Vinalines) might have been tipped off about the warrant.

The warrant was issued against Dung, 55, for deliberately violating state regulations as chairman of Vinalines between 2005 and February 2012.

Colonel Tran Duy Thanh, director of the ministry's anti-graft investigation department, told a conference on Tuesday (May 22) that his agency would issue an international arrest warrant if they found Dung had gone abroad.

"It was unclear what motivated Dung to flee. We are investigating if there was any information leak," he said.

Thanh said investigators have not been able to locate Dung since they first tried to apprehend him at his office and home on May 17.

On the same day, investigators arrested Mai Van Phuc, deputy director of the Ministry of Transport's Transport Department and Vinalines' former general director, and Tran Huu Chieu, Vinalines' deputy general director.

Dung's deputy, Do Duc Tien, told Tuoi Tre (Youth) newspaper he saw Dung working at the office that morning but he was not there in the afternoon when the investigators came.


Former Vietnam Marine Department director Duong Chi Dung

His neighbors on Hanoi's Dong Da Street said they saw Dung and his wife going out to have breakfast on May 16, but they had not seen them since.

Col. Thanh said Dung had been summoned several times during investigations into corruption accusations at Vinalines, and that the official had "admitted to wrongdoings, including acting against the central government's instructions, the Investment Law and Bidding Law."

The case

The warrant came following wrongdoings discovered in a Vinalines' contract to buy a dilapidated floating dock from Russia, leading to the detainment of four officials in February on embezzlement charges.

Further investigations found evidence of embezzlement involving Dung, Phuc and Chieu.

Col. Thanh said that in August 2006, the government instructed Vinalines to draft a detailed plan for a project to build a ship repair factory in Ba Ria-Vung Tau Province.

Instead of submitting a plan for approval, Dung decided unilaterally to invest VND3.854 trillion (US$185 million) in the project in 2007. A year later, Dung approved a proposal by Phuc to increase the investment to VND6.489 trillion.

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In 2007, Dung approved a $14 million project to buy the floating dock to be installed at the planned factory.

Investigators said the dock, manufactured in 1965, was dilapidated and thus prohibited for import into Vietnam. They also said the dock was imported while the factory project had not yet broken ground and thus, they had to pay another VND100 billion to store and maintain it.

Meanwhile, government inspectors said Vinalines committed several violations in the construction of 14 ports between 2007 and 2010, including in management, design approval and construction. Most of these projects caused losses.

The major investigation was launched after Vinalines announced losses of VND660 billion in the first six months of last year.

Vinalines was also found to have ineffectively invested its public money in non-core businesses like stock trading and real estate.

Dung and Phuc have been held responsible for bad debts at five Vinalines affiliates totaling VND23 trillion ($1.1 billion).

As of press time, Dung was still at large.

Kicked upstairs

In February, less than two months after the Government Inspectorate completed its inspections and found wrongdoings at Vinalines, Minister of Transport Dinh La Thang appointed Dung to a higher position as director of the Vietnam Marine Department an agency under his ministry.

Experts have criticized the appointment, saying Dung's background should have been thoroughly considered and he should have not been offered the new position while wrongdoings were being found at his office.

Le Thi Thu Ba, former chairman of the National Assembly's Judicial Committee, said there should not have been such a "questionable" appointment.

"A look into one's record is a must before appointing the person to a higher position," she said.

Vu Quoc Hung, former deputy chairman of the Party's Central Inspection Committee, said it was "unacceptable" that Dung was appointed to the new post.

"It is necessary to clarify the responsibility of the individual and office that appointed him," he said.

Le Manh Hung, deputy minister of transport, said Dung was appointed in February, before the Governmental Inspectorate officially released their findings in April.

However, analysts said it was an unsatisfactory defense because the inspectors had submitted preliminary findings to the government before Dung's appointment.

Cao Sy Kiem, a National Assembly deputy of Thai Binh Province and former State Bank governor, said: "It is necessary to clarify whether or not Dung's appointment was motivated by any personal interests."

Carlyle Thayer, a Canberra-based Vietnam expert, said the Vinalines case once again illustrates "the problems of transparency, oversight and control of state-owned enterprises (SOE) in Vietnam which give rise to a culture of corruption.

"I expect more arrests to follow once police have interrogated those already arrested. It takes a network of individuals to collude in mismanagement and the misallocation of funds," he said.

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