Court Sends Vietnam Shipbuilding Execs To Prison

Court sentenced nine former execs of a shipbuilding company to prison after a high-profile scandal that damaged the country's credit rating.

HANOI, Vietnam (AP) -- A court in Vietnam sentenced nine former executives of a shipbuilding company to prison, state media reported Friday, after a high-profile scandal that damaged the country's credit rating.

The court in the northern port city of Hai Phong sentenced Pham Thanh Binh, former chairman of state-owned Vietnam Shipbuilding Industrial Group, to 20 years on charges of violating government regulations, Thanh Nien and online newspaper VNExpress reported.

Seven other former executives of the group known as Vinashin received sentences ranging from 10 to 19 years on the same charge. Another former Vinashin executive, Nguyen Tuan Duong, received a 3 year-sentence for misusing government property.

All nine were accused of violating government regulations that nearly led to the conglomerate's collapse. They faced terms of up to 20 years.

Vinashin, one of Vietnam's largest state-owned companies, was teetering on the edge of bankruptcy in 2010 after expanding into areas outside shipbuilding that included everything from animal food production to tourist resorts. Its debts were estimated in June of that year at $4.5 billion -- about 4.5 percent of the communist country's gross domestic product.

At stake in the court case was a loss of $43 million from the purchase of three used ships without government approval and the importation of two secondhand power plants.

Online newspaper VnExpress quoted Binh as telling the court Tuesday that he purchased a ship from Italy without government approval because he wanted to develop a high-speed sea link more quickly. Vinashin purchased the ship in 2007 for 60 million euros ($80 million).

The shipbuilding conglomerate was established in 1996 and the Communist government had high hopes that it would become one of the world's top shipbuilders while serving as an example of the country's new success as it opened up to foreign trade and investment.

In December 2010, Vinashin defaulted on the first payment on a $600 million loan from a group of creditors led by Credit Suisse.

Ratings agencies have downgraded Vietnam's credit rating, citing problems at Vinashin as one of the reasons for the action.

The case was extensively covered in the state-controlled media and a National Assembly member in 2010 shocked many in a bold move by calling for an investigation to determine whether Cabinet members, including Prime Minister Nguyen Tan Dung, were responsible for the losses.