Former chairman of state-owned retailer Saigon Co.op gets 10 years in jail for $4.74 mln loss

The Ho Chi Minh City People’s Court on Friday handed down a 10-year prison sentence to former chairman of Vietnamese retailer Saigon Co.op Diep Dung for "abuse of power while on duty".

The jury ruled that Dung masterminded the use of VND1 trillion ($41.2 million) of Saigon Co.op's operating capital for outside investments, causing a loss of more than VND115 billion ($4.74 million) to the state-owned company.

Nguyen Thanh Nhan, former general director of Saigon Co.op, was also sentenced to five years in prison; former financial director Ho My Hoa received 3 years in jail; and Vo Thanh Trung, CEO of the New Urban Development JSC (NUD), and Ton That Hao, CEO of Dai A Land Corporation, both got 5 years behind bars.

Four other former Saigon Co.op officials were sentenced to 2-3 years in prison for “showing irresponsibility causing serious consequences”.

The court forced NUD and Dai A Land to jointly pay the VND115 billion ($4.74 million) loss to Saigon Co.op.

The court said that Saigon Co.op had mobilized VND3 trillion ($123.6 million) from investors to implement a plan to buy back the Big C supermarket chain.

A resolution of the Saigon Co.op board of directors stated that if the deal was not successful, the investors’ capital would be refunded. In cases where the investor did not withdraw the capital, it would be included in the company’s charter capital.

However, since March 2016, Dung, without approval of the board of directors, invested VND300 billion ($12.36 million) in Dai A Land and VND700 billion ($28.84 million) in NUD at an interest rate of 7% over three months. After receiving money from Saigon Co.op, Hao and Trung deposited it at banks and received more than VND9.4 billion ($387,300) in interest.

After three months, Hao and Trung agreed with Dung to sign four contract annexes to extend the cooperation period to 12 months and continued to use Saigon Co.op's money for investments in other companies. However, citing ineffective investments, in 2018, Hao and Trung asked Dung to adjust the interest rate from 7% to 0%.

During the process, Dung directed his subordinates to complete disbursement procedures as well as accounting documents on the interest rate reduction for his partners, causing a loss of VND115 billion ($4.74 million) to Saigon Co.op.

With his final words in court, Dung once again admitted all of his violations and expressed his wish to serve his sentence quickly and return as a valuable member of society.