Graft probe to widen as ringleaders lose death penalty plea

Court officials have warned of a widening investigation into the country's biggest corruption scandal after its ringleaders failed in their appeal against the death penalty.

'This should not be seen as the end, but just the beginning. It could well go higher,' an investigator warned.

The comments come as a new administration within the powerful and secretive Interior Ministry begins a series of intensive probes within sections of the Government and Communist Party elites.

The Ho Chi Minh City appeals court upheld death sentences by firing squad against four ringleaders.

Eleven others, including top bankers apparently bribed for loans, received lengthy prison terms.

Pham Huy Phuoc, former director of Communist Party-affiliated trading firm Tamexco, led appeals with a stirring claim of innocence and pleas for his mother and children.

Phuoc's high-rolling lifestyle was found to have been fuelled by a string of loans from state-controlled banks - deals garnered as Tamexco collapsed.

He was accused of taking US$26 million (HK$201.24 million) in state funds alone, blowing tens of thousands on drunken card games and buying a villa for his mistress.

But the appeal shed little light on controversial approvals for loans to Tamexco granted by the State Bank of Vietnam in the early 1990s.

Chu Van Nguyen, State Bank deputy governor, 'did not answer clearly' when asked if his signature was enough to give the go-ahead to several US$1 million loans to clear Tamexco debts, the state press reported.

At the first trial, Mr Nguyen refused to answer questions concerning his approvals - which were later overturned - saying he had come to court as a witness, not as a defendant.

The jury at the time accepted his explanation and asked him no further questions.

Deputy Interior Minister, Major-General Le The Tiem, warned yesterday that high-level officials were using 'very cunning tricks' to avoid detection.

'Alarming corruption in some key economic sectors has destroyed the quality of State officers, added to the budget deficit and undermined the people's belief in the regime,' the general said.