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Unraveling the Viet Oil Scandal: A Complex Web of Bank Connections

30 November, 2024

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On the afternoon of the 26th of November, the People’s Court of Ho Chi Minh City continued the first-instance trial of defendant Mai Thi Hong Hanh, former Director and Chairman of the Members’ Council of Xuyen Viet Oil Company, along with 14 accomplices. The trial proceeded with the rebuttal of the representative of the Ho Chi Minh City People’s Procuracy.

The representative of the Ho Chi Minh City People’s Procuracy acknowledged the argument presented by the defense lawyer of Mai Thi Hong Hanh, who contended that the defendant did not fall under the category of a merchant as defined by law. According to this perspective, Hanh’s violations in the management of the Price Stabilization Fund (PSF) should only be subject to administrative penalties rather than criminal liability.

However, the Procuracy representative asserted that there was sufficient evidence to establish Hanh’s status as a merchant, based on legal documents such as business licenses and the testimonies of related defendants.

Specifically, Xuyen Viet Oil Company – enterprise code 0303830539, formerly known as Xuyen Viet Limited Liability Company – was initially granted a business registration certificate on May 31, 2005, by the Ho Chi Minh City Department of Planning and Investment. In 2015, Mai Thi Hong Hanh purchased the company’s shares, changing its name to Xuyen Viet Oil Trading, Transportation, and Tourism Limited Liability Company. Its registered business address was at 465-467 Hai Ba Trung, Vo Thi Sau Ward, District 3, Ho Chi Minh City, but it actually operated at 69-71-73 Ly Chinh Thang, Vo Thi Sau Ward. The company’s main business line was the trading of gasoline and related products. Its charter capital increased from 50 billion VND in 2015 to 3,000 billion VND as of December 31, 2021 (the 16th registration change).

Mai Thi Hong Hanh served as the Director and Chairman of the Members’ Council, holding 98% of the capital contribution. Meanwhile, Mai Thi Ngoc Trinh, Hanh’s younger sister, owned 2% of the capital contribution but was merely a nominal shareholder. In reality, Hanh was the sole owner, possessing full authority over the company’s business operations, assets, and finances.

The defendants in court

Therefore, the Procuracy affirmed that the criminal prosecution of Hanh was entirely justified.

The defense lawyer’s perspective, which suggested that pursuing criminal liability against Hanh was unconvincing as her actions fell within the scope of administrative violations, was countered by the Procuracy representative. They explained that according to current Vietnamese law, violation handling must consider the extent and consequences of the actions. For merchants trading in gasoline, repeated violations could result in the cancellation of their business contracts or the revocation of their certification as a gasoline trading business.

However, based on the investigation results, the Procuracy determined that Hanh’s violations in the establishment of the PSF had caused a loss of 219 billion VND, which could not be recovered.

As per the provisions of the Law on Handling of Administrative Violations, in cases where there are indications of criminal offenses, the competent authorities must transfer the case to criminal prosecution agencies for handling. The law also prohibits retaining cases with criminal indications for administrative handling. Hence, the lawyer’s argument that Hanh’s actions fell within the scope of administrative violations was unfounded.

Regarding the defense’s perspective that attributing a loss of 219 billion VND to Hanh was unconvincing, the Procuracy presented a counterargument.

The Procuracy stated that the 219 billion VND loss was identified as damage to the PSF and had been acknowledged by Hanh herself. Her decision not to request an audit of this data indicated her acceptance of the accuracy of the stated loss amount.

Concerning the environmental protection tax, the defense argued that the damage figure related to this tax, exceeding 1,200 billion VND, was correctly stated in the indictment. Hanh did not request an audit of the damage figure determined by the authorities. The Procuracy affirmed that this was a well-founded consequence of the case.

Additionally, Hanh’s testimony admitted to the damage figure mentioned in the indictment, which aligned with the investigation results of the Security Investigation Agency and the Supreme People’s Procuracy. Hanh did not object to the attributed loss amount in the case and did not request an audit of the data.

The Procuracy emphasized that the responsibility for establishing the PSF and fulfilling environmental protection tax obligations rested with Hanh, and her failure to comply had resulted in severe consequences in the case.

Regarding the perspective that the enterprise was entitled to tax relief policies according to various directives, the Procuracy affirmed that these policies did not apply to environmental protection taxes.

In the case of Nguyen Thi Nhu Phuong, deputy director of Xuyen Viet Oil Company, the defense lawyers presented two main perspectives: her role in the case was insignificant, and there was insufficient evidence to conclude that she was an accomplice of Hanh.

However, based on Phuong’s testimony and awareness, the inspector determined that she was aware that the PSF was not the property of the enterprise and that the fund balance did not match the actual figures in the reports. Nonetheless, she followed Hanh’s instructions and made false declarations to state management agencies, including the Domestic Market Department, among others. Phuong signed and submitted these misleading reports to the Ministry of Finance and the Ministry of Industry and Trade.

The Procuracy representative informed that the Supreme People’s Procuracy is currently coordinating with the Security Investigation Agency of the Ministry of Public Security to further investigate other financial irregularities, including loans related to Xuyen Viet Oil Company at several banks and credit institutions.

Regarding the separation of the case for resolution in the second phase, according to the indictment of the Supreme People’s Procuracy, the indications of violations related to Xuyen Viet Oil Company’s loans at certain banks have not been concluded by specialized agencies in terms of asset valuation.

Consequently, on August 30, 2024, the Security Investigation Agency of the Ministry of Public Security separated the actions and documents related to this matter to continue the investigation and clarification, as per the Notice of Receipt and Assignment of Crime Information No. 3869.

Tran Thai