Saigon businessperson gets life in jail for $21.6 million bank fraud

29-Jan-2019 Intellasia | VN Express | 6:00 AM Print This Post

The head of a Vietnamese coffee company who defrauded five banks of $21.6 million will be jailed for life.

The HCM City People’s Court Friday sentenced Nguyen Xuan Binh, 59, former chair of private company Truong Ngan to life imprisonment.

The firm’s director, Nguyen Dang Son, 37, was sentenced to 16 years in jail for obtaining property by fraud.

The indictment said that Binh had initially borrowed about $40 million from an unknown source to invest in his company’s coffee business and construction of facilities.

However, with the company not doing well, he borrowed approximately $24.3 million from five banks in 2012 to service his debt.

The five lenders were Vietinbank’s South Saigon branch, VIB’s District 5 branch, OCB’s District 4 branch, Techcombank’s Saigon branch and Maritime Bank’s Do Thanh branch.

Binh instructed Son to falsify the amount of coffee the company possessed, from about 8,600 tonnes to 20,800 tonnes, as collateral for the banks.

In 2013, the company’s coffee inventory was seized by the banks because it could not service the loans. However, due to conflicts of interest between the banks, the seized coffee could not be liquidated.

By March 2017, due to the lengthy legal processes involved, most of the seized coffee had been damaged. Specifically, 5,000 tonnes of coffee was damaged, leaving just 1,299 tonnes usable.

The HCM City court also sentenced three former employees of Vietinbank’s South Saigon branch to between 3 years in probation and 3 years in jail for negligence resulting in serious consequences.

Because they did not accurately assess the coffee inventory of the Truong Ngan Company used as collateral, the bank has lost over $5.2 million.

The Vietnamese government is currently the majority shareholder of Vietinbank, the country’s second largest lender by assets, and Japan’s Bank of Tokyo-Mitsubishi UFJ (BTMU) is its foreign strategic shareholder.

https://e.vnexpress.net/news/business/companies/saigon-businessman-gets-life-in-jail-for-21-6 million-bank-fraud-3874340.html

 


Category: Finance, Vietnam

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