HANOI, Vietnam (AP) — Nine former senior executives of a Vietnamese state-owned shipbuilding giant go on trial Tuesday for causing losses of $43 million to the state in a high-profile case that damaged the country's credit rating.
Pham Thanh Binh, the former chairman of the Vietnam Shipbuilding Industrial Group, known as Vinashin, and the others are accused of violating government regulations that nearly led to conglomerate's collapse.
The losses occurred as a result of the purchase of three used ships without government approval and the importation of two power plants.
If convicted the former executives face up to 20 years in jail. The trial, held in the northern port city of Hai Phong, is expected to last four days, said a court official on condition of anonymity citing policy.
Vinashin, one of the Communist country's largest state-owned companies, was teetering on the edge of bankruptcy in 2010. It amassed huge debts estimated as of June that year at $4.5 billion — about 4.5 percent of the country's gross domestic product. It had expanded into areas outside shipbuilding that included everything from animal food production to tourist resorts.
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 investment and trade.
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.