Japan temporarily halts aid to Vietnam over bribery case

PUBLISHED : Tuesday, 03 June, 2014, 11:53am
UPDATED : Wednesday, 04 June, 2014, 4:16am


Japan had temporarily suspended official development aid to Vietnam over a bribery case, officials said yesterday, dealing a possible blow to Tokyo's efforts to shore up its relationship with Hanoi.

New loans and funding for an ongoing urban railway project have been halted after six Vietnamese railway officials were detained over allegations of corrupt payments, the foreign ministry said.

The scandal emerged in March when Japanese media reported that the national tax agency had flagged up 100 million yen (HK$7.6 million) of payments that could not be properly accounted for. Japan Transportation Consultants (JTC), which is involved in several official development aid programmes, is suspected of having paid the money to officials in Vietnam, Uzbekistan and Indonesia, the reports said.

Vietnamese investigators later arrested six people, including Tran Quoc Dong, a deputy general director of Vietnam Railways, reports said.

On Monday, Japan said development aid would be resumed following an investigation in Vietnam and if measures are put in place to avoid a repeat, a foreign ministry official said.

Japan had also suspended official aid to Uzbekistan over the same bribery case and was in discussions with Indonesia, the official said.

The suspension of aid from Vietnam's biggest donor country comes as Japan's ties with Vietnam are warming, with Tokyo offering support to Hanoi in its escalating stand-off with China over disputed waters.

The relationship-building, spearheaded by Japanese Prime Minister Shinzo Abe, is aimed at forging a regional counterweight to China, which neighbours regard as being increasingly aggressive in its various territorial claims.