A Vietnamese court has jailed a former bank executive for 30 years on Friday for illegally withdrawing more than 9 trillion dong ($A534 million), the biggest such loss brought to light in the country’s banking sector, state-run newspapers reported.
Pham Cong Danh, former chairman of the Construction Bank, was found guilty by the Ho Chi Minh City People’s Court of intentional wrongdoings and violations of lending rules, the official Thanh Nien (Young People) newspaper said.
Danh stood trial with 35 other defendants, including many of the bank’s executives. The former chief executive officer was jailed for 22 years.
Starting as a tile seller, Danh expanded his family shop into a company dealing with building materials, real estate and tourism before buying the small, debt-ridden Trust Bank in 2012, which was later renamed the Construction Bank, based in the Mekong Delta province of Long An.
Danh and his bank staff had drawn up false lending papers to withdraw funds from the bank, even after it was placed under special supervision by the central bank because of its losses.
Vietnam’s fragmented banking sector has undergone major reform in recent years, with stricter lending and debt classification, forced takeovers, numerous fraud investigations and the formation of a state-run asset management company to lend support.
The State Bank of Vietnam, the country’s central bank, bought the Construction Bank in early 2015 and assigned Vietcombank, the country’s biggest listed bank, to oversee the restructuring process.