A court in Vietnam has sentenced a former banking executive to 30 years in prison and ordered that she pay more than US$700 million (S$936.5 million) in damages caused at a domestic bank, state media reported on Friday (June 1).
Hua Thi Phan, 71, embezzled US$278 million from the Vietnam Construction Bank, formerly known as Great Trust Commercial Joint Stock Bank, where she had been a senior board adviser, the Ministry of Public Security’s “People’s Police” newspaper said.
The court, in its late Thursday ruling, ordered Phan to return the money and pay additional interest, compensation and fines totalling over US$700 million, according to Tuoi Tre, another state newspaper.
The trial concluded at a time global rating firms said Vietnam’s banking regulations lag behind international standards, and as financial firms flock to the country, hoping to capitalise on its fast growth.
It also comes days after a court upheld a key judgement in the “Super-Swindler” trial, Vietnam’s largest-ever case of fraud, which highlighted its ability to tackle financial crime at a time when foreign banks are heeding government calls to invest.
In Phan’s month-long trial, which was reported by state media on Friday, the former executive was convicted of violating economic regulations and abusing trust.
The 71-year-old did not attend the trial at Ho Chi Minh City People’s Court due to “health conditions”, state media said.
With the help of 27 accomplices, Phan abused her position at the bank to embezzle cash with which she bought property in Ho Chi Minh City, Vietnam’s business hub, that she later sold back to the bank at artificially higher prices, state media said.
Vietnam Construction Bank could not provide immediate comment.
Vietnam has over recent years arrested and tried several bankers over financial irregularities as it seeks to restructure a banking system still reeling from nonperforming loans, mismanagement and under-regulated lending. The Straitstimes reports.
Though the State Bank of Vietnam said last month that non-performing loans had been reduced to less than 3 per cent of outstanding loans, ratings firm Fitch said it believed non-performing loans remain under-reported and true asset quality is likely to be weaker than stated.
S&P Global said last month Vietnam’s banking regulations lag international standards, underscoring industry risks for banks.
“Banks’ credit risks remain extremely high, in our opinion, reflecting high private sector debt, low income levels, legacy stressed assets, and rudimentary underwriting standards,” S&P Global said.