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Home > Blogs > Ian Fraser > Vietnam turns to executions in bid to clamp down on graft

Vietnam turns to executions in bid to clamp down on graft

Vietnam turns to executions in bid to clamp down on graft Ian Fraser

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They do things differently in Vietnam. In a bid to quell public unrest and an explosion of online dissent about the levels of corruption in government and among the country’s state-owned enterprises, one banker and three senior business executives have recently been sentenced to death.

Two ex bosses of the state-owned shipping company Vietnam National Shipping Lines, also known as Vinalines, received death sentences on 16 December. The previous month the former general-director of Agribank Financial Leasing Co. No. 2 was condemned to death as was the chairman of a construction company. If carried out, the death sentences will be by lethal injection.

Following a four-day trial, the Hanoi People's Court found Duong Chi Dung, former chairman of Vinalines, and the shipping firm's former general director, Mai Van Phuc, guilty of embezzling $476,000 each. The case involved kickbacks linked to Vinaline’s controversial decision to buy an old, decrepit and inoperable floating dock from a Singaporean firm in late 2007. Vinalines has been unable to make use of the dock, which was constructed in Japan in 1965, but its ownership has brought massive repair and maintenance bills which still amount to $47,000 per month.

Judge Ngo Thi Anh said that tough sentences were needed to deter graft. "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 as she announced the verdict.

Dung, 56, fled after the scandal broke in May 2012 when Vinalines defaulted on $1.1 billion of loans. He was arrested in September 2012 in the neighboring country of Cambodia after three months on the run. "Going on the run showed that he (Dung) wanted to escape from his responsibilities," the court president said, adding that Dung was the linchpin of the embezzlement scheme, which was estimated to involve more than $1.5 million.

Eight other defendants, all officials at Vinalines or other state-owned entities, were jailed for between four and 22 years on charges of defying state regulations and embezzlement. "I did not take any money. I have been wrongly charged," Dung insisted in court. He did however accept some responsibility for the Vinalines debt scandal, and apologized to "the party, state, national assembly, government, people and Vinalines employees".

At a criminal trial in November 2013, Vu Quoc Hao, former general-director of Agribank Financial Leasing Co. No. 2, and Dang Van Hai, former chairman of a construction company, were also sentenced to death. Hao was charged with embezzling almost 532 billion dong ($25 million) of state property. Eight other defendants who prosecutors charged with embezzlement, mismanagement, abuse of power and fraud were sentenced to between three and 14 years in jail. The People’s Court of Ho Chi Minh City heard that Hao and Hai created 10 fake financial leasing contracts to disperse almost 800 billion dong.

There's a degree of Voltairian "pour encourager les autres" and Stalinist "show trials" to all this.

Meanwhile, some western bloggers have suggested that countries such as the the United States and United Kingdom would be more likely to root out wrongdoing in its own banking system if criminal bankers were to be executed:-

— Vietnam Shows How To Clean Up The Banking System: Ex-Banker Faces Death Penalty For Fraud -

— zerohedge (@zerohedge) - November 13, 2013

Vietnamese government certainly wants to be seen as tough on white-collar crime as it works towards cleaning up a banking system that is weighed down with the highest levels of bad debt in south-east Asia, and to turn around an economy whose growth had fallen to 5%, down from the pre-2008 levels of 8% plus. Vietnamese courts have held 278 corruption trials this year, while the state inspectorate has uncovered 80 new fraud cases involving state funds, according to data from Bloomberg. Separately the government has this year imprisoned more than 45 journalists and bloggers for criticizing the regime.

However some doubt whether the crackdown will achieve very much. Adam Sitkoff, executive director of the American Chamber of Commerce in Vietnam argues that the government really needs to address deeper-rooted governance issues in the state-owned enterprises sector. He told Bloomberg News:-

“Corruption and conflict of interest issues are embedded in the fabric of the state-owned enterprise sector. Without addressing fundamental governance issues, progress will remain challenging and the continued misallocation of resources continues at a time when Vietnam needs to be making wiser decisions about capital outlays and business strategy.”

Speaking in Vietnam on December, US secretary of state John Kerry suggested Vietnam is on the cusp of “another great transformation” as a result of the “the opportunities that would come from the Trans-Pacific Partnership” which Vietnam and the US are currently negotiating with other nations in the Asia-Pacific region. Kerry a veteran of the Vietnam war added:-

“[The TPP] will complement Vietnam’s efforts to transform state-owned enterprises and important sectors of the economy like energy and banking, which will attract greater investment.”

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Tags: 'white collar' crime , Agribank FLCO , capital punishment , corruption , death penalty , Duong Chi Dung , embezzlement , fraud , John Kerry , kickbacks , Trans-Pacific Partnership , Vietnam , Vinalines , Vu Quoc Hao
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