Trial of Mr. Tran Bac Ha's case of manipulating a loan of 3,100 billion VND is coming soon.
Mr. Tran Bac Ha - former Chairman of BIDV Board of Directors, was accused of setting up a "backyard" company to carry out a cattle breeding project, manipulating illegal loans of more than 3,000 billion VND.
It is expected that from October 26, the Hanoi People's Court will hold a first-instance trial of 12 defendants in the case at the Bank for Investment and Development of Vietnam (BIDV). Judge Vu Quang Huy will preside over the trial.
More than 40 lawyers registered to defend the defendants and those with related rights and obligations. The panel also summoned representatives of the People's Committee of Ha Tinh province, the Central Credit Council and nearly 100 related individuals and organizations. Mr.Tran Bac Haplayed an important role throughout the case, but died in detention due to illness, so the investigation was suspended.
According to the indictment of the Supreme People's Procuracy, in early 2015, Mr. Ha sent many documents to the Provincial Party Committee and People's Committee of Ha Tinh province requesting support for investment in a high-tech cattle breeding project, committing that BIDV would provide capital and introduce two experienced investors to support, An Phu Company and Hoang Anh Gia Lai Group.
However, An Phu Company is run by Tran Duy Tung (Mr. Ha's son, who is on the run from the police), so according to BIDV regulations, it is not allowed to provide credit to this company. Therefore, Mr. Ha proposed to establish Binh Ha Livestock Joint Stock Company, with a charter capital of 200 billion VND, as a "backyard". 2 out of 3 shareholders of Binh Ha only contributed capital on behalf of Tran Duy Tung, the remaining person was introduced by Hoang Anh Gia Lai Group. Tung was accused of directly managing and directing all activities of this company.
In April 2015, Mr. Dinh Van Dung - General Director of Binh Ha Company "set up" by Tung signed an official dispatch requesting BIDV to provide credit capital for a cattle breeding investment project with a scale of 150,000 cows per year, with a total investment of 4,230 billion VND in Cam Xuyen and Ky Anh districts, Ha Tinh.
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| A corner of the cattle breeding project of Binh Ha Company in Ha Tinh province. Photo: Duc Hung. |
The indictment determined that Mr. Ha signed the decision to finance capital for Binh Ha Company to implement the project with a total loan value of more than 3,100 billion VND. Binh Ha did not meet the conditions for credit, but during the process of contract implementation and disbursement, BIDV headquarters and BIDV Ha Tinh branch amended the credit conditions 8 times in the direction of ignoring some regulations or loosening the conditions.
From 2015 to November 2018, BIDV Ha Tinh branch disbursed more than VND2,600 billion in loans to Binh Ha. During the disbursement process, BIDV failed to control the cash flow generated after business operations, allowing Binh Ha shareholders to use the loan capital for the wrong purposes, through contractors, embezzling and misappropriating the disbursed money, authorities alleged.
Since Binh Ha Company implemented the project, the company's production and business activities have accumulated a total loss of more than VND 900 billion. As of the time of the criminal prosecution (November 2018), the total outstanding principal debt was more than VND 1,200 billion. The total outstanding debt at BIDV that cannot be recovered is nearly VND 800 billion.
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| A corner of the cattle breeding project of Binh Ha Company in Ha Tinh province. Photo: Duc Hung. |
The investigation results determined that during the process of providing capital to Binh Ha, many subordinates confessed to knowing about the violations but were pressured by Mr. Ha so they had to accept the implementation. Defendant Tran Luc Lang - former Deputy General Director in charge of BIDV's credit risk management department, had seen that Binh Ha did not meet the financial capacity requirements as well as the cow farming plan was not feasible, with many potential risks. When proposing, Mr. Lang asked the enterprise to supplement its own capital and collateral, but Mr. Ha did not agree. Therefore, Mr. Lang had to sign documents directing the branch to lend, disburse, and amend the credit conditions for Binh Ha 8 times.
Mr. Lang said that at first he only knew that Binh Ha was a joint venture between An Phu Company and Hoang Anh Gia Lai Group. It was not until mid-2018 that Mr. Lang learned that this was Mr. Ha’s backyard company used to apply for investment licenses, borrow capital and implement the project.
Defendant Doan Anh Sang - former Deputy General Director in charge of corporate customers admitted that the signing of the approval decisions was against BIDV's regulations, but because Mr. Ha repeatedly pressured and directed him to sign, he was forced to sign. Later, when the Ha Tinh Provincial Police investigated the cattle breeding project, Mr. Sang learned that Binh Ha and the cattle breeding project were the "backyard" of the former Chairman of BIDV.
When Binh Ha's cattle breeding project began to fail, Mr. Sang and Mr. Phan Duc Tu (BIDV General Director, now Chairman of the Board of Directors) asked Mr. Ha to take responsibility for remedying the consequences and repaying BIDV. Seeing this, Mr. Ha requested BIDV to restructure Binh Ha Company's loan for a few more years, with a grace period for interest rates and repayment terms. At that time, Mr. Ha would use revenue from agricultural investment activities in Laos and Cambodia to repay BIDV about 200 billion VND per year, until the debt was paid off. Mr. Sang's actions were accused of causing BIDV nearly 800 billion VND in damage.
Like the two Deputy General Directors of BIDV, defendant Kieu Dinh Hoa, Director of BIDV Ha Tinh branch, stated that he had not boldly refused to lend capital to Binh Ha, so he had made proposals and disbursed capital in violation of regulations.
Regarding the loan process, Mr. Hoa stated that the customer reception office was Binh Ha Company, then introduced them to the Ha Tinh branch to contact for loan procedures. During the disbursement process, the branch discovered some problems with Binh Ha, not meeting all the conditions according to the authorization, so the disbursement was stopped. Binh Ha Company then reacted, sending a petition to Chairman Ha. Because of this, Mr. Ha requested the dismissal of the Director of BIDV Ha Tinh branch.
Knowing that Binh Ha Company did not meet the conditions for loan approval, Mr. Hoa, as Deputy Head of the Appraisal Team, still signed the official dispatch and the submission requesting BIDV Headquarters to amend the credit conditions for the project 8 times. During the capital disbursement process, Mr. Hoa did not request Binh Ha to fully implement the conditions as approved by the Headquarters, leading to the shareholders of this company appropriating the disbursed money for personal use, causing a loss of nearly 800 billion VND to BIDV, the Supreme People's Procuracy stated.
Regarding the act of abusing trust to appropriate money from selling beef cattle by the defendant Dinh Van Dung and his accomplices, the indictment determined that the money from selling cattle collected from brokerage companies and slaughterhouses must be transferred to Binh Ha's account at BIDV Ha Tinh branch for the bank to control and offset debts. Due to not having any capital contribution, under the direction of Tran Duy Tung, the defendants Dinh Van Dung, Tran Quang Anh and Thai Thanh Vinh appropriated the money from selling cattle for personal expenses and contributed capital to prove counterpart capital for BIDV to continue disbursing loans. The defendants were accused of appropriating nearly 150 billion VND from BIDV, but during the investigation, 128 billion VND was recovered.
8 people were prosecuted for the crime of "Violation of regulations on banking activities and other activities related to banking activities", according to Clause 4, Article 206, Penal Code 2015, including: Tran Luc Lang (53 years old, former Deputy General Director of BIDV in charge of risk management), Doan Anh Sang (59 years old, former Deputy General Director of BIDV in charge of corporate customers), Kieu Dinh Hoa (59 years old, former Director of BIDV Ha Tinh branch), Le Thi Van Anh (36 years old, former Head of BIDV Ha Tinh branch customer department), Ngo Duy Chinh (57 years old, former Director of BIDV Ha Thanh branch), Nguyen Xuan Giap (46 years old, former Deputy Director of BIDV Ha Thanh), Pham Hong Quang (41 years old, former Head of BIDV Ha Thanh customer department), Dang Thanh Nam (39 years old, former BIDV Ha Thanh officer).
4 defendants were prosecuted for the crime of ""Abuse of trust to appropriate property", according to Clause 4, Article 175: Tran Anh Quang (38 years old, former General Director of Binh Ha Company), Dinh Van Dung (55 years old, former General Director of Binh Ha Company), Doan Hong Dung (59 years old, former Director of Trung Dung Company), Nguyen Thi Thanh Son (57 years old, capital contributor of Trung Dung Company).