Vietnam’s graft trial: Defense lawyer blames ousted Party bigwig for sanctioning backyard banking services

The lawyer says Dinh La Thang enabled scandal-hit OceanBank to function as the de facto internal institution for PetroVietnam.
People pass a branch of Ocean Bank located at the Petro Vietnam's building in Hanoi on September 1, 2017. Photo by Reuters/Kham
The defense lawyer of a former PetroVietnam chairman facing the death sentence in a massive graft trial has said his client just enforced the executive orders already sanctioned by a recently dismissed high-ranking official who then headed the state energy giant.

Prosecutors on Thursday sought the death penalty for Nguyen Xuan Son, who was Petro Vietnam’s chairman from 2014 until he was arrested in 2015, on charges of embezzlement. Son was also charged with abuse of power and economic mismanagement.

The proposed sentence came as the OceanBank trial, with 51 bankers and businessmen in the dock, was halfway through its expected 20-day duration, opening a can of worms in one of Vietnam’s toughest corruption crackdowns of which PetroVietnam and the banking sector have been at the center.

Son was the CEO of OceanBank between 2008 and 2010, during which time PetroVietnam became a major shareholder. The 55-year-old, who had held various executive positions at PetroVietnam from 2003, is accused of pocketing around $11 million from the bank.

He was charged with abusing his power to railroad OceanBank into forking out illegal interest payments in pursuit of personal gains. According to prosecutors, more than 50,000 individuals and nearly 400 businesses and organizations have been identified as the beneficiaries of such interest payments worth $70.4 million from OceanBank.

But Son’s defense lawyer, Nguyen Minh Tam, dismissed such allegations on Thursday, saying the buck stopped with Dinh La Thang, the chairman of PetroVietnam between 2006 and 2011.

Tam essentially argued that it was Thang that signed off on documents that authorized OceanBank to function as the de facto internal institution tasked with exclusively handling all financial transactions for PetroVietnam.

Tam invoked a document dated September 2010 in which Thang asked PetroVietnam’s contractors and units to open accounts at OceanBank and use other financial services there.

According to Tam, in September 2008, Thang had already signed off on another document stating that PetroVietnam would use OceanBank-provided services. Tam noted that Son did not become CEO of OceanBank until three months later, suggesting his client had no sway on the issue.

“No one at PetroVietnam, including Son, could upend such policies,” Tam said at the trial. “There is thus no reason to charge him with abusing his power to usurp assets.”

Grilled by prosecutors on such policies last Monday, Hoang Van Dung, a PetroVietnam representative, said the group only encouraged its units to use OceanBank’s financial services “on a voluntary basis.”

Lawyers are scheduled to continue spelling out their defenses Friday. Ha Van Tham, the former OceanBank chairman, is facing life imprisonment on charges ranging from embezzlement to abuse of power. Other ex-bankers are facing up to 27 years in jail.

Dinh La Thang was dismissed from the Communist Party's decision-making Politburo in May, and later fired from his position as the leader of Ho Chi Minh City.

Thang was held responsible for “serious” violations and mismanagement during his time as PetroVietnam's chairman from 2009 to 2011. The Central Inspection Committee, the Party’s top watchdog, also blamed Thang for an excessive stake purchased in OceanBank. PetroVietnam held a VND800 billion ($35 million) stake in the bank, but that was completely written off when the central bank took it over in 2015.

Since May, Thang has been demoted to the post of vice head of the Central Economic Commission, which advises the Party on economic policies.

The punishment handed down to him was the harshest to be meted out to a Politburo member in years, if not decades.

"This is a very unusual case," Zachary Abuza, a Southeast Asia analyst in Washington, said of Thang's dismissal. The Party is trying to "show that even the most politically powerful are not immune."

By Staff reporters