HCM City (VNA) – The second-phasetrial against Pham Cong Danh, ex-Chairman of Board of Directors of the VietnamConstruction Bank (VNCB) and his accomplices entered the third day on January10, when the Ho Chi Minh City court began questioning the defendants.

Defendant Phan Thanh Mai, former DirectorGeneral of VNCB, asked the judging council to reconsider the over 6.1 trillionVND (267.8 million USD) that was defined as the consequence of the case.

He said the 6.1 trillion VND included over 4trillion VND used to raise VNCB’s charter capital and this sum of money wasstill at VNCB. 

Mai said there are many assets which could bethe basis for settling the case’s consequences but haven’t been considered, andthat Pham Cong Danh had not been allowed to settle consequences before theinvestigation agency evaluated the losses in the case.

The judging council said the use of borrowedmoney to raise charter capital is not in line with legal regulations.Therefore, VNCB’s proposal to raise its charter capital by using borrowed moneywas rejected by the State Bank of Vietnam. At the same time, the central bank’sfinancial assessment showed that the amount of money was no longer at the bankat the time legal proceedings were launched for the case.

According to the indictment, in 2013 and 2014,Pham Cong Danh, who is also ex-Chairman of the member council of Thien ThanhGroup, ordered executives and staff of VNCB and Thien Thanh Group to compilefalse documents in the names of 29 companies which were established in Danh’sname or others, in order to take loans from Saigon Thuong Tin Commercial JointStock Bank (Sacombank), Tien Phong (TPBank) and Bank for Investment andDevelopment of Vietnam (BIDV).

[Indictment against former Construction Bank executive announced]

Danh used the borrowed money for personalpurposes and failed to pay off the sum.

He and his accomplices also used VNCB’s money todeposit at Sacombank, TPBank and BIDV as guarantee for his companies’ loans.The banks later kept the money as payment for the loans. Danh and accomplices’acts caused losses of more than 6.1 trillion VND (267.8 million USD) to VNCB.

At the trial, former Vice Chairman of SacombankTram Be said when Pham Cong Danh asked to borrow from over 1 trillion VND to 2trillion VND, he agreed but also requested collateral. As Danh said he had, TramBe assigned Phan Huy Khang, then Director General of Sacombank, toconsider the borrowing dossier. 

Later, Khang reported to Be that he agreed tolend 1.8 trillion VND to Danh, which was also the maximum loan sum within TramBe’s power of approval. On April 25, 2013, Tram Be signed off the Sacombankbranches of Hung Dao and District 8’s proposals to lend money to Danh’scompanies.

The chief judge of the trial cited the Law onCredit Organisations that aside from collateral, business and debt repaymentplans are also conditions for giving loans.

In response, Tram Be said he had not studied theLaw on Credit Organisations carefully before assigning Phan Huy Khang toconsider lending procedures. He said that his only concern was to know PhamCong Danh had collateral and he only gave approval of the lending, while theprocedures were the responsibility of the Director General.

While accepting the responsibility when he onlytook into account collateral to approve loan provision, Be said this action didnot run counter to regulations. He said he treated Danh as the representativeof a collective legal entity, and his acquaintance and discussion with PhamCong Danh could not be considered as having personal interest and a reason tocharge him with deliberately violating regulations.

Phan Huy Khang admitted to his fault inmanagement, but said he trusted and followed Tram Be’s instruction. He said he hadexamined all lending conditions but employees did not do “strictly”. Heaffirmed that using deposit as collateral for loans is in line withregulations.

The questioning at court will continue as the trial will last until February 7.-VNA