Death sentences fail to inspire financial-sector confidence
HUW WATKIN in Hanoi
The harsh sentences meted out this week in Vietnam's biggest fraud trial are unlikely to restore confidence in the banking sector because of continuing endemic corruption and the absence of an effective regulatory framework, according to industry sources.
Local bankers and economists said the case had severely damaged confidence in Vietnam's emerging banking sector, and that as much as US$3 billion in much-needed capital remained locked away in Vietnamese homes as a result.
Despite the harsh sentences there was a strong perception that bankers were criminals, said one Vietnamese economist.
At the moment there is very poor supervision of transactions and a lack of expertise means questionable transactions often went unnoticed, he said.
More sentences are expected to be handed down in the coming week after the Ho Chi Minh City People's Court condemned six men to death on Wednesday for their role in the embezzlement from four state-controlled banks of $280 million.
Prosecutors had sought the death penalty for eight of the 77 people on trial, which involved an elaborate conspiracy between prominent businessmen and senior state employees in order to access loans to fund a series of speculative land deals.
Among those sentenced to death was Lien Khui Thin, head of Epco, a former State-controlled trading company, and senior banking executives Pham Nhat Hong and Nguyen Ngoc Bich.
Also sentenced to death was Tang Minh Phung, head of the Minh Phung group which was seen as a star player in Vietnam's emergent market economy until the scam was exposed in 1997.
Six other defendants were sentenced to life in prison, including Le Minh Xu, a former official from a police import-export company who had already been sentenced to life for his part in Vietnam's biggest smuggling case.
The Epco-Minh Phung case has shocked Vietnam where the average annual income is $300 a year, and senior ruling Communist Party members have conceded that corruption is becoming a serious threat to the country's social order.
Wednesday's sentencing came just one day before official media reported Phung Ngoc Loi, director of Long An General Import-Export had been arrested in connection with a conspiracy to misappropriate more than $70 million.
Earlier this week, senior party ideologue Dao Duy Quat said the nation's leadership was becoming more concerned at the amount of government-level corruption.
A recent report suggested that the Ministry of Finance could not account for close to $6 billion worth of state property, a figure representing about 30 per cent of all state assets.
Requests through official channels for a clarification of the report - or even a denial of its validity - have to date been unsuccessful, but Mr Quat said Hanoi's powerful politburo had launched an investigation into allegations of corruption among senior party members.
'There is an investigation of allegations under way, but not against any specific individual,' he said. 'It is [being] conducted in relation to complaints and allegations [but] we hope to conclude whether the allegations are correct first.' The probe comes as part of a larger self-examination by the party ordered by general secretary Le Kha Phieu in May.