Former machine maker VEAM chairman sentenced to 11 years in prison

Tran Ngoc Ha, former chairman of the Vietnam Engine and Agricultural Machinery Corporation (VEAM), was sentenced to 11 years in prison on Tuesday for violating regulations on management and use of state assets.

The Hanoi People's Court also required Ha to pay VND52 billion ($2.24 million) in compensation to the state.

VEAM, a joint stock company with the state as majority shareholder, is a joint venture partner in Honda Vietnam, Toyota Vietnam and Ford Vietnam, holding a 30%, 20% and 25% stake respectively.

Ha was found guilty of allowing his subordinates at VEAM to advise on and submit guarantee documents for bank loans toward Vetranco, a VEAM subsidiary. He was also the one who decided to spend money on two projects that were stalled midway.

Ha's acts caused over VND127 billion ($5.47 million) in damage to VEAM. The jury noted that during the trial period, his family had paid VND1 billion to remedy the consequences.

Former VEAM general director Lam Chi Quang was sentenced to eight years in prison on the same charges. Quang was mainly responsible as he had signed the loan guarantee documents.

The jury assessed that defendants Ha, Quang and other former officials at VEAM committed "very serious violations", infringing on order and security in economic management of an enterprise with state ownership, causing damage to the state budget and market disorder.

"Strict sentences are necessary to punish individuals who go against the interests of the state, people and society," the judgment stated.

The trial panel forced defendant Tran Quang Tien, former board chairman of Dai Nam Group JSC, who was sentenced to the highest sentence - 16 years in prison, to pay Vetranco more than VND182 billion. Vetranco is responsible for repaying VEAM more than VND137 billion.

Ha and several defendants must jointly compensate VEAM for damage caused by the two stalled projects, totaling VND66 billion. Of this, Ha's responsibility is nearly VND52 billion.

The Supreme People's Procuracy determined that, from 2011 to 2013, VEAM chief accountant Vu Tu Cong advised, proposed and drafted documents for submission to general director Lam Chi Quang, who signed five bank guarantee documents for Vetranco loans worth VND193 billion.

With the VEAM guarantee, Vetranco borrowed money from banks to do business with Minh Quang Investment JSC, Minh Quang Steel JSC, Future Investment JSC, and Hai Dang Import Export Trading Investment Company Ltd. These companies have since stopped operating, have no assets and are unable to repay debts to Vetranco.

Because Vetranco had no source of money to repay loans, banks forced VEAM to pay debts worth nearly VND76 billion on its behalf.

Moreover, Vetranco director Dao Quoc Viet lent money from the VEAM-guaranteed loans to Tran Quang Tien, board chairman of Dai Nam Group Investment JSC, to enjoy interest.

According to the accusations, in order to conceal the illegal lending, Viet and Tien drew up fake goods contracts. Tran Quang Tien failed to repay 15 loans borrowed from May 2013 to August 2013, causing a loss of nearly VND183 billion to Vetranco.

Authorities determined that when implementing the investment project to manufacture medium-sized, four-wheel tractors as well as signing and implementing two VEAM-ZIBO agreements on investment and development of right-hand drive cars, VEAM staff caused the state damages of VND66 billion.