Vietnam Sentences Top Shipping Execs to Death for Embezzlement

2013-12-17
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Duong Chi Dung (C-front) and his accomplices listen to the verdict at the Hanoi People's Court, Dec. 16, 2013.
AFP

A court in Vietnam has sentenced two high-ranking executives at state-run shipping company Vinalines to death for embezzlement, amid rising public anger over rampant corruption.

In a four-day trial, the Hanoi People's Court convicted former Vinalines chairman Duong Chi Dung, who had fled the country but was apprehended, and former general director, Mai Van Phuc, of stealing U.S. $476,000 each.

But the lawyer for Dung and Phuc, in an interview with RFA’s Vietnamese Service, questioned the evidence on which his clients were sentenced.

Eight other defendants were given prison terms of between four and 22 years for corruption or related crimes.

The Associated Press quoted court president Ngo Thi Anh as saying that the harsh sentences were meant to send a message to corrupt officials.

“All the defendants were party members and cadres and had many excellent achievements, but they became depraved and intentionally violated state regulations on economic management,” she said in announcing the verdict.

Dung and Phuc have 14 days to appeal the sentence, though it was unclear if they would.

Dung fled the country after the scandal broke in May 2012 when the company defaulted on loans worth more than U.S. $1.1 billion, but was arrested in September last year in Cambodia and extradited home.

According to the official Tuoi Tre news, the death sentence was related to Dung’s decision in 2007 to purchase a damaged floating dock from Russian company Nakhodka, which he said would serve the operations of a ship repair plant.

The dock was purchased through Singapore’s AP Company for U.S. $9 million, despite the broker having arranged a payment of U.S. $2.3 million for the dock with Nakhodka.

Tuoi Tre said that Dung had pocketed more than U.S. $1.6 million of government funds used to purchase the dock which, including repairs and transportation from Russia, caused a loss of U.S. $17.3 million to Vietnam’s state budget.

Agence France-Presse quoted court president Anh as saying that “Dung's behavior caused especially serious consequences.”

“Going on the run showed that he wanted to escape from his responsibilities,” Anh said.

Claim of innocence

Dung maintained his innocence during the trial, telling the court that he “did not take any money” and had been “wrongly charged,” though he did accept responsibility for the Vinalines debt scandal, AFP reported.

Defense lawyer Tran Dinh Trien on Tuesday told RFA’s Vietnamese Service that that the evidence against his clients was lacking.

Trien said that according to court documents, a contract was signed between AP and Nakhodka in July 2007 which “mentioned money for a third party worth U.S. $1.6 million,” but that in the contract between AP and Vinalines, no mention was made of the funds.

He told the court that the money was connected with an investment contract for a project in Hai Phong and unrelated to the floating dock purchase, but said the court refused to hear his argument.

Attorney Bui Quang Nghiem, who has been watching the case, told RFA that those who assisted Dung in fleeing the country by tipping him off on the day of his planned arrest would also have to be investigated.

“If there is no other trial held related to [Dung fleeing the country], then we need to talk about those responsible,” he said.

“But if there is a further investigation and trial related to those who helped Dung escape—among whom was his brother Duong Tu Trong—Dung’s refusal to provide answers in court would be acceptable.”

Earlier in his trial, Dung admitted to receiving help in fleeing from his younger brother Trong—who at the time was deputy director of the Hai Phong City Police—but refused to reveal in court who had called to warn him of his impending arrest, saying it was related to another case to be tried.

Nghiem said that even if Dung and Phuc appeal, and the upper court upholds their sentences, the death penalty was unlikely to be carried out immediately, pending the other trial.

Rampant corruption

The trial of Dung and Phuc marks a test of the government's pledges to fight graft and reform state-owned enterprises, which are responsible for some two-thirds of the country’s economic capital and assets.

In 2010, a similar scandal at state-owned shipbuilder Vinashin, which nearly collapsed under debt of about U.S. $4.5 billion, sparked investor concerns over the management of the country’s other government-run firms.

Vinalines took on many of Vinashin’s projects, but also allegedly mismanaged them.

Following public outcry over the shipbuilder, the government admitted Prime Minister Nguyen Tan Dung had played a role in allowing the mismanagement of state-owned firms including Vinashin, but said the "shortcomings and mistakes" were not serious enough to warrant disciplinary action.

In a well-publicized court case, nine Vinashin officials were given long-term prison sentences in 2012 for knowingly violating state regulations.

Vietnam is ranked as one of the world's most corrupt nations, and graft is a top concern for many ordinary people, who see it contributing to the country’s continued economic problems.

Last month, a former banker and his business associate at a large state bank were sentenced to death for embezzling U.S. $25 million.

Reported by Mac Lam for RFA’s Vietnamese Service. Written in English by Joshua Lipes.