Why did Mr. Dinh La Thang "shake hands" so quickly with Mr. Ha Van Tham?

On the second working day, the first instance trial of Mr. Dinh La Thang and his accomplices in the case of Intentional Violation occurred at the Vietnam Oil and Gas Group (PVN),Prosecutors and lawyers continue to clarify the three times PVN contributed 800 billion VND to Oceanbank.

The testimony of the defendants and related parties over two days focused on explaining why PVN chose Oceanbank to invest. The reason why PVN lost 800 billion was also explained.

Oceanbank is the best choice of PVN

In a half hour response to lawyer Phan Trung Hoai (defending Mr. Dinh La Thang) about the circumstances leading to PVN's capital contribution to Oceanbank, former PVN deputy general director Nguyen Ngoc Su saidWhen giving up the establishment of Hong Viet Bank (a private bank for the oil and gas industry) with a capital scale of 5,000 billion VND, PVN had a "headache" with dealing with the number of hundreds of people participating in the preparatory committee of Hong Viet Bank.

"Based on the Prime Minister's directive that each enterprise is allowed to invest no more than 20% of its charter capital in a bank, the PVN Board of Directors is urgently looking for a bank to buy charter capital and also to handle the above personnel," said Mr. Su.

Mr. Su remembers that the Hong Viet Bank's preparatory committee at that time tried to approach many banks such as Phuong Nam (or Nam A), Kien Long, Hang Hai... to buy capital, but the partners could not meet the demand. There were banks that required too high a stock price or did not allow PVN to participate in management and operations.

Mr. Nguyen Xuan Son (former deputy general director of PVN, head of the preparatory committee of Hong Viet Bank at that time) also stated that at the end of 2008, when Hong Viet Bank was stopped from being established, PVN faced two major problems. First, how would jobs for hundreds of employees be resolved?Second, unused technical facilities, computers, software networks, etc. will cause waste. And the main thing, according to Mr. Son, is that shareholders as well as PVN lost money on this "failed" project.

According to Mr. Son, PVN then reported the situation to its superiors and was instructed: If this bank is not established, then find another bank to contribute capital to improve the restructuring of State-owned commercial banks.PVN has negotiated with many banks but partnersboth require high stock prices and/or do not accept the above two conditions.

At the same time, Mr. Ha Van Tham (Chairman of the Board of Directors of Ocean Bank) and Mr. Son contacted each other. Ocean Bank at that time wanted to increase its charter capital and find a strategic partner. Meanwhile, PVN needed to deal with some existing problems of Hong Viet Bank. When Ocean Bank accepted PVN's conditions, Mr. Son arranged a meeting between Mr. Thang and Mr. Tham.

Testifying for this, Mr. Tham stated in court that in the first meeting, "Mr. Thang wanted to be "sure" so he immediately signed an agreement to contribute 800 billion VND to Oceanbank, along with the two conditions mentioned above." Mr. Tham said that the agreement had been carefully prepared by PVN because it had been signed with many banks and revised many times. When "shaking hands" with PVN, Mr. Tham assessed it as a good opportunity for both sides.

During the past two days of interrogation, Mr. Dinh La Thang also admitted many times: At the end of 2008, Oceanbank was a suitable bank for capital investment. Reports submitted by subordinates showed that Oceanbank was small in scale, but was looking for a strategic shareholder of the size of PVN for development.

PVN lost 800 billion due to not divesting capital?

The indictment alleges that it was Mr. Dinh La Thang and his subordinates who directed and implemented PVN’s capital contribution to Oceanbank that caused a loss of 800 billion VND to PVN. However, many testimonies in the past two days explained the cause differently.

According to Mr. Tham's presentation, Oceanbank's acceptance of PVN's capital contribution was authorized by competent authorities and the bank had a report.In 2011, to increase Oceanbank's charter capital to 4,000 billion, Mr. Tham applied for a license from the Department of Planning and Investment and reported to the banking supervision agency. At that time, PVN contributed an additional 100 billion, which was part of the plan to reach 20% of Oceanbank's charter capital.

According to Mr. Tham, at this time the Law on Credit Institutions is in effect, only allowing one shareholder to hold no more than 15%. If PVN wants to divest capital without violating the law, it will face many difficulties, because "if you do not violate this, you will violate another." A large enterprise like PVN that wants to sell capital must notify at least six months in advance.

Ha Van Tham at court on the afternoon of March 20

Mr. Tham said that year, PVN did not plan to divest only 5% of its capital but the entire capital. Mr. Tham knew that PVN's acquisition of 20% of Oceanbank's capital in 2011 was against the regulations, because the Law on Credit Institutions had come into effect. Mr. Tham reported this to the superior inspection agency and was not fined.The inspector did not request the return of capital but only stated the divestment roadmap in the 2012 inspection report.

According to Mr. Tham's testimony, when he met a senior leader, he was advised: "Find a partner to sell PVN shares." Mr. Tham introduced a number of buying partners and one of them had studied PVN's share records.agreed to buy 20% of PVN's capital for 800 billion. However, before this could be implemented, Mr. Tham and many leaders of Oceanbank were arrested, at a timeSome time later (in 2015) Oceanbank was bought by the State Bank for 0 VND.

Mr. Tham said that PVN lost 800 billion VND because Oceanbank was bought for 0 VND. He also affirmed that buying for 0 VND was not correct. He held nearly 70% of Oceanbank's shares but when the bank was sold he did not know because no one discussed it.

According to Mr. Tham, Oceanbank is not losing money or weak enough to be bought for 0 VND. During this period, the bank has recovered more than 8,000 billion VND from bad debts and still has collateral so its value cannot be calculated as 0.

“If it was bought for 0 VND, can PVN ask for the assets or the mortgage money back?”, Mr. Tham said and hoped the jury would reconsider this purchase so that PVN would not suffer losses. According to the former Chairman of OceanBank, Oceanbank also owns a very large amount of real estate, which according to regulations must be signed by the Prime Minister.

Mr. Tham also affirmed that PVN's capital contribution in this case is not related and is not the reason why Oceanbank was bought for 0 VND.

Mr. Thang: The accusation of the People's Procuracy causes injustice to everyone.

Mr. Phung Dinh Thuc (former General Director of PVN) as a person with related rights and obligations also testified in court that there was a partner who wanted to buy back 20% of PVN's shares in Oceanbank. According to him, since 2012, PVN has considered restructuring state-owned enterprises, including PVN. Divestment in general in non-core enterprises has also begun. In March 2012, PVN completed the restructuring project and planned to divest all capital of 800 billion in the period of 2013-2015..

According to Mr. Thuc, after PVN reported to the Government on the restructuring project, the Prime Minister gave his opinion in June 2012. Nearly a year later (March 2013), the Prime Minister approved the restructuring project.

In 2014, a partner agreed to buy PVN's capital. In 2014, the Government agreed to let PVN divest but then directed to stop to reorganize the banking sector. But according to Mr. Thuc, there are still 1.5 years left until the divestment deadline approved by the Prime Minister for PVN. "If the plan is implemented, PVN cannot lose 800 billion", the former General Director of PVN affirmed.

Mr. Dinh La Thang also said that the State Bank's purchase for 0 VND "happened later, there was no dialectical relationship between investing in Ocean Bank and being bought back by this bank for 0 VND". Therefore, according to him, the accusation of the People's Procuracy was inappropriate, causing injustice to himself and all the defendants in the case.

Today, the trial continues.

>>Why did PVN lose 800 billion VND when investing in OceanBank?