Bank 'bosses' and securities companies collude to do wrong to benefit together

On June 28, the Hanoi People's Court brought defendants Phan Thanh Long (born in 1954, former General Director of Vietnam Tin Nghia Commercial Joint Stock Bank), Nguyen Thi Phi Yen (born in 1974, former Head of Bach Mai Transaction Office, Vietnam Tin Nghia Commercial Joint Stock Bank), Hoang Minh Son (born in 1956, former Chairman of the Board of Directors of Truong Son Securities Joint Stock Company - TSS), Ho Hoai Nam (born in 1977, former General Director of TSS) and Nguyen Trung Thanh (born in 1980) to trial for the crime of violating regulations on lending in the operations of credit institutions.

Tin Nghia Commercial Joint Stock Bank (TNB) is headquartered in District 1, Ho Chi Minh City with a charter capital of VND 3,399 billion, the Chairman of the Board of Directors is Mr. Vu Van Thanh. In December 2011, the State Bank decided to merge 3 banks including: First Bank, Saigon, Vietnam Tin Nghia into Saigon Commercial Joint Stock Bank (SCB).

Truong Son Securities Joint Stock Company (TSS) has the business lines of securities brokerage and securities investment consulting, the legal representative is Mr. Pham Ngoc Thang, General Director.

After adjusting the operating license, Mr. Hoang Minh Son is the Chairman of the Board of Directors, Ho Hoai Nam is the General Director of TSS. In addition, Mr. Hoang Minh Son also founded and is the Chairman of the Board of Directors of Vietnam International Joint Stock Company and Vietnam Investment Joint Stock Company.

Join hands to do wrong, share the benefits

According to the accusation, taking advantage of the policy on lending for discounting valuable papers to trade in securities according to Decision No. 03/2008/QD-NHNN dated February 1, 2008 of the State Bank of Vietnam and Decision No. 39A/QD.HDQT dated December 10, 2009 of TNB Bank regulating lending for investment and trading in securities, Mr. Phan Thanh Long, General Director of Tin Nghia Commercial Joint Stock Bank, signed a contract with Truong Son Securities Joint Stock Company.

This is a cooperation contract for lending money to TNB to sell listed securities. The Bank assigned Bach Mai Transaction Office to implement the contract, which violated Decision 39A/QD.HĐQT dated December 10, 2009 of TNB Bank promulgating regulations on securities lending.

Implementing the cooperation contract with Truong Son Securities Joint Stock Company, from May 31, 2010 to September 14, 2011, Ms. Nguyen Thi Phi Yen, Director of Bach Mai Transaction Office, did not direct the inspection of TSS's loan application, did not check the use of loan capital, and disbursed to TSS a total of more than VND 2,714 billion into TSS's account opened at TNB, so that defendants Hoang Minh Son, Ho Hoai Nam, and Nguyen Trung Thanh could use it to roll over the loan debt at TNB and serve business activities.

The allegation is that during the disbursement process, TNB did not properly follow the loan procedures for advancing money for selling listed securities, and did not fulfill its responsibility to re-check the information and documents transferred by TSS according to regulations.

The investigation results determined that TNB Bank and TSS Company had a credit relationship through a cooperation contract for lending money in advance for securities sales. However, verification at the State Securities Commission showed that on September 12, 12, and 14, 2011, the entire content of the 28 securities transaction result confirmations was not real, there was no customer name, no matched transaction results, and all were fake confirmations.

Mr. Ho Hoai Nam and Nguyen Trung Thanh confessed that, under the authorization of Mr. Hoang Minh Son, Mr. Nam and Thanh directed TSS employees to obtain information from customers, create and sign fake loan application files to complete loan applications to serve TSS's business activities.

The amount that Bach Mai Transaction Office, TNB Bank disbursed into TSS's account, was then authorized by TSS to withdraw cash or transfer money to other accounts of TSS Company for use.

In this “business deal”, the leaders of both TNB and TSS benefited. The accusation is that the two sides colluded to take advantage of the policy of lending money in advance for securities sales to benefit together.

The defendants' actions violated regulations on lending for investment and securities trading. As of October 31, 2011, TSS still owed more than VND43 billion in principal and VND1.7 billion in interest that it could not pay.

Mr. Ho Hoai Nam and Nguyen Trung Thanh acted as accomplices in assisting the defendants Phan Thanh Long, Hoang Minh Son and Nguyen Thi Phi Yen in committing the crime of violating regulations on lending in the operations of credit institutions.

After the case was initiated, from March 11, 2015 to June 15, 2015, Mr. Hoang Minh Son transferred more than 43 billion VND and then transferred more than 1.7 billion VND in interest to the account of Saigon Commercial Joint Stock Bank (SCB) to pay the principal and interest of TSS Company at Vietnam Tin Nghia Commercial Joint Stock Bank.

After consideration, the panel sentenced defendants Phan Thanh Long and Nguyen Thi Phi Yen to 42 months in prison. The remaining defendants received suspended sentences of 30-36 months.