Vietnam shipbuilding boss jailed 20 years for Vinashin financial losses

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A HAIPHONG court has jailed the former chairman of the state-owned Vietnam Shipbuilding Industry Group (Vinashin) for 20 years over a scandal which shook investor confidence in the nation, reports Singapore's AsiaOne News.

State-owned groups, many badly managed, control two-thirds of the nation's capital. Before its near-failure, Vinashin was seen as a model of state-owned enterprise that would lead Vietnamese efforts to compete on the global stage.

In 2008, the company had US$6 billion of orders on its books, 60,000 employees, 28 shipyards and projected growth of 35 per cent a year, according to a briefing note by consulting firm Oxford Analytica.

Pham Thanh Binh, 58, was convicted of violating state regulations while heading Vinashin, which almost collapsed with billions of dollars of debt. He received the maximum punishment.

Eight other former executives at the company were sentenced between three and 19 years. "This case caused serious economic consequences," court president Tran Van Nghiem said in the ruling in the northern city of Haiphong.

"The behaviour of Binh and the other defendants was very dangerous, damaging public opinion, reducing public trust and the prestige of the country in the eyes of foreign investors and resulting in stagnant business and production that forced the government to appoint a new management," he said. "Therefore, the defendants should be seriously punished."

The former Vinashin executives were accused of losing more than US$43 million mostly from the procurement of an Italian-made high-speed passenger boat as well as two electricity plants.

In December 2010, the company defaulted on the first US$60 million installment of a US$600 million loan arranged by Credit Suisse in 2007, but no further information on the loan settlement since then is available.

Binh admitted during his four-day trial that he had made mistakes but insisted that he had not acted for his own personal gain. "With my devotion for the shipbuilding industry, sometimes I made mistakes that were against regulations and the government's guidance," he told the court.

Source Shipping Gazette - Daily Shipping News

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