Hanoi (VNA) – Six defendantscharged with “deliberately violating the State’s regulations on economicmanagement, causing serious consequences” at the Vietnam Social Security (VSS)and the Agribank Financial Leasing Company No. 2 (ALC II) were brought to courton September 18.

The first-instance trial, scheduled to last fora week, is held by the People’s Court of Hanoi.

The defendants include Le Bach Hong (born in1954, former Deputy Minister of Labour, Invalids and Social Affairs and formerGeneral Director of the VSS), Nguyen Huy Ban (born in 1948, former GeneralDirector of the VSS), and Nguyen Phuoc Tuong (born in 1951, former head of theplanning-finance department – now the planning-investment department – andformer chief accountant of the VSS),

Hoang Ha (born in 1976) and Tran Tien Vy (bornin 1957), both former heads of the general planning division under theplanning-finance department of the VSS, were also tried for the same charge aspursuant to Clause 3 of Article 165 of the 1999 Penal Code.

Meanwhile, Tran Thi Thanh Thuy (born in 1979),former specialist and former deputy head of the general planning division ofthe VSS’s planning-finance department, had to stand in the dock for “lackingresponsibility, causing serious consequences” under Clause 2 of Article 285 ofthe 1999 Penal Code.

According to the indictment of the SupremePeople’s Court, the VSS was allowed to use the temporarily idle money of thesocial insurance fund for development purposes. The social insurance fund’sinvestment activities must comply with the 2006 Social Insurance Law and otherregulations.

Under Article 79 of the 2006 Social InsuranceLaw, which took effect on January 1, 2007 and other regulations, the VSS wasonly permitted to give loans to the Vietnam Development Bank, the Vietnam Bankfor Social Policies and State-owned commercial banks.

Meanwhile, ALC II was a non-bank creditorganisation. It was not permitted to borrow from the VSS, which in turn wasalso not permitted to provide loans for ALC II.

However, in February and March 2008, with a needfor capital to fund business activities in finance leasing, then ALC II GeneralDirector Vu Quoc Hao met Nguyen Huy Ban and Nguyen Phuoc Tuong to ask forloans. The two sides agreed that to take loans from the VSS, ALC II must havethe guarantee of Agribank (Vietnam Bank for Agriculture and Rural Development).

In March and April 2008, Hao signed twodocuments asking the Agribank General Director for the reception of VSS loans.Basing on ALC II’s request, then Agribank General Director Nguyen The Binhsigned three payment guarantee letters for ALC II to take VSS loans.

From April 2008 to August 2009, VSS staff made14 documents proposing Nguyen Huy Ban and Le Bach Hong lend ALC II moneysourced from the social insurance fund. With the two’s approval, 14 contractsin which the VSS lent ALC II 1.01 trillion VND (43.6 million USD at currentexchange rate) were implemented.

The Supreme People’s Court found that the loanshad not been provided for appropriate borrowers and the lending had notcomplied with the investment principles of the social insurance fund, which rancounter to articles 96 and 97 of the 2006 Social Insurance Law.

On July 31, 2018, the People’s Court of Ho ChiMinh City declared the bankruptcy of ALC II. By that time, this company hadjust repaid one short-term contract while the 13 remainders were overdue withthe total debt of more than 1.697 trillion VND, including over 769 billion VNDin original loans and over 928 billion VND in interest.

ALC II was unable to repay the debts, causingtotal losses of over 1.697 trillion VND to the State.

Among the defendants, Le Bach Hong was chargedwith signing and directing the implementation of three loan contracts, causinglosses of over 434 billion VND. Nguyen Huy Ban was charged with signing anddirecting the implementation of 11 contracts, leading to losses of over 1.263trillion VND./.