Former Vietcombank director gets 16 years in prison for illegal lending

Former director of Vietcombank's Tay Do branch, Nguyen Minh Chuyen, was sentenced to 16 years in prison on Friday for breach of lending regulations.

The illegal lending caused VND278 billion ($11.92 million) in losses to the state-owned commercial bank, prosecutors said.

The Can Tho city court found Chuyen, 57, guilty of “breaching regulations on lending in operations of credit institutions” under Article 179 of the Penal Code.

Tran Anh Huy, former head of the branch's customer division, was sentenced to 10 years in prison on the same charges. Three other former bankers prosecuted in the case received 18-30 months of suspended prison sentences.

The court ordered Chuyen, Huy and some other defendants to pay Vietcombank more than VND100 billion ($4.28 million) in compensation for damages that have not been offset.

According to the indictment, Chuyen, as the director of the bank branch, had approved loans to some groups of known customers against regulations. He directed his subordinates to skip the regulatory steps of examination and appraisal to "legalize" credit records, leading to big losses for the bank.

In 2015, Vietcombank asked the Ministry of Public Security to verify potential criminal actions of four corporate customers that borrowed from the bank: Nam Song Hau, Truong Nguyen, Indochina Steel and An Do.

The State Bank of Vietnam’s Can Tho branch had in March 2015 conducted a credit quality assessment at Vietcombank Tay Do. Following the assessment, it proposed that documents be sent to investigative agencies to clarify irregularities relating to six groups of corporate customers, including the four mentioned above.

Vietcombank, listed on the Ho Chi Minh Stock Exchange as VCB, is one of the largest lenders in Vietnam, with the state being the majority shareholder.