Former PVN chairman prosecuted for serious economic violations
  • | | December 09, 2017 12:17 PM
 >>  Former PVN chairman Dinh La Thang arrested
 >>  Former OceanBank CEO sentenced to death for embezzlement
Former Chairman of the Member Council of PetroVietnam (PVN), Dinh La Thang, has just been arrested and prosecuted for investigations in the losses of VND 800 billion in PVN’s investment in OceanBank and embezzlement involving the Thai Binh 2 thermal power project.

A file photo of Dinh La Thang

Thang, who is currently a member of the Party Central Committee and deputy head of the Party Central Committee’s Economic Commission was arrested on Friday together with PVN's former Deputy General Director Nguyen Quoc Khanh on a charge of deliberately violating state regulations on economic management leading to serious consequences, which was part of police's investigation into two serious economic cases related to the PVN.

PVN as an investor in the Thai Binh 2 thermal power project was found to have violated financial regulations after advancing a huge amount of money for the project, which later became losses.

PVN transferred USD8.2 million and more than VND1.317 trillion (USD57.26 million) to the management board of the Thai Binh 2 project, even though the bidding EPC (engineering, procurement and construction) contract for the project was yet to be signed, according to the Vietnam News Agency.

The management board later advanced USD6.6 million and VND1.31 trillion (USD57.8 million) to PVC, which eventually resulted in a loss of more than VND51.7 billion (USD2.28 million) and over USD66,000 in interest until the EPC contract took effect on October 11, 2011.

Regarding PVN's violations in the investment in Ocean Bank, PVN's chairman Thang had signed various decisions and documents with former Ocean Bank chairman Ha Van Tham for cooperation.

In 2008, PVN contributed VND400 million or 20 percent stake to Ocean Bank when the bank increased its charter capital to VND2 trillion (USD88.13 million). And when the bank continued to raise charter capital to VND3.5 trillion in 2009 and VND4 trillion in 2011, the state-owned petrol group also increased its investment to maintain its 20 percent stake.

A report showed that by March 31, 2014, Ocean Bank's bad debts rose by nearly VND15 trillion (USD661 million).

In May 2015, the State Bank took over Ocean Bank after the bank reported losses of USD445 million and bad debts accounted for nearly 50 percent of its total outstanding loans. This means PVN lost VND800 billion (USD35.25 million) of its 20 percent stake in the bank.

It is said that PVN did not report any problems at Oceanbank despite sending three staff to supervise the bank's operation during that time.

In September, PVN's former chairman, Nguyen Xuan Son, who represented PVN’s stake at Ocean Bank and acted as the bank's CEO, was sentenced to death for embezzlement, abuse of power and violating state economic management regulations.

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