Vietnam sentences two former state officials to death for embezzlement

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Duong Chi Dung (C), former chairman of Vinalines, stands trial with his subordinates in Hanoi. Dung and a former general director of Vinalines received the death sentences Monday for "embezzlement" and "intentionally violating state regulations on economic management, causing serious consequences."

Two former bigwigs of the state-run Vietnam National Shipping Lines (Vinalines) were sentenced to death Monday for embezzling VND10 billion (US$474,000) each in a high-profile case that rocked the country, galvanizing its leaders into pledging to crack down on grand corruption.

Duong Chi Dung, the former chairman of Vinalines, and Mai Van Phuc, its former general director, received the death sentences after a Hanoi court convicted them of "embezzlement". Dung and Phuc also got 28 years and 18 years respectively for "intentionally violating state regulations on economic management, causing serious consequences," the court said.

Last week prosecutors also sought death sentences for the two men. They were also asked to pay back VND110 billion each to the state exchequer as damages for their wrongdoings, the court said.

The pair were among 10 defendants in the four-day trial that began last Thursday in Hanoi in a case that has highlighted Vietnam's efforts to show it is clamping down on corruption in the face of widespread public anger over the issue.

Of the other defendants, Tran Huu Chieu, the former deputy general director, and Tran Hai Son, the former director of a unit, got 19 years and 22 years respectively for "embezzlement" and "intentionally violating state regulations on economic management, causing serious consequences."

Two other Vinalines employees, three customs officers and an officer with the Vietnam Register office received jail terms between four and eight years for "intentionally violating state regulations on economic management, causing serious consequences."

The court also asked those defendants to pay damages of up to billions of dong each.

The case

Prosecutors from the Supreme People's Procuracy, Vietnam's highest prosecutors' office, said that in 2007, with Duong Chi Dung's approval, Vinalines began to build a shipyard to repair ships in the south at a cost of more than VND3.8 trillion ($180.1 million).

It bought the dock from Russian-owned company Nakhodka through a Singapore brokerage called AP. Manufactured in Japan in 1965, it was heavily damaged and unusable, and originally offered for $2.3 million, but Vinalines ended up paying a whopping $9 million to buy it and another $10.5 million to repair it.

Tran Huu Chieu, then vice general director of Vinalines, and Tran Hai Son, then director of Vinalines Ship Repairing Ltd., Co, Mai Van Khang, an employee of Vinalines, and Le Van Duong, an employee of the Vietnam Register, visited Russia to inspect the dock

They were aware of its condition and real price, and reported them to Dung and Mai Van Phuc, then director general of Vinalines. But the two ordered them to write a report saying the dock was in good enough condition to buy.

Dung, Phuc, Chieu, and Son received $1.66 million from the foreign partners for the deal, according to the indictment.

Dung fled the country, allegedly with the help of his police officer brother when the scam first broke last year, but was apprehended in Cambodia and brought back to Vietnam. 

Three customs officers in the south-central province of Khanh Hoa were found guilty of "illegally" clearing the dock. 

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They were aware of its condition and real price, and reported them to Dung and Mai Van Phuc, then director general of Vinalines. But the two ordered them to write a report saying the dock was in good enough condition to buy.

Dung, Phuc, Chieu, and Son received $1.66 million from the foreign partners for the deal, according to the indictment.

Dung fled the country, allegedly with the help of his police officer brother when the scam first broke last year, but was apprehended in Cambodia and brought back to Vietnam. 

Three customs officers in the central province of Khanh Hoa also face charges for "illegally" clearing the dock.

No surprise

Given the scope of corruption of the case, analysts say they are not taken aback by the outcome of the trial.

"This will be a big deal for the government to try to deflect criticism that they are not doing enough about corruption," Zachary Abuza, a Washington-based Southeast Asia analyst, told Thanh Nien News.

But the analysts say without structural reform, corruption will continue to take its toll on an economy that is hamstrung by bad debts and recorded its slowest growth rate since 1999 last year.

On the bright side, the outcome of the trial will serve as a potential deterrent to prevent other businessmen and executive from engaging in these acts, analysts say.

"Senior business officials are not immune from prosecution and when they are caught they are likely to be abandoned by their high-level contacts," Carl Thayer, a Vietnam expert at the University of New South Wales, said.

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