Former Chairman and General Director of Cienco 1 faces proposed sentence of 9.

On the afternoon of June 7th, the Hanoi People's Court continued the trial of the case involving the embezzlement of hundreds of billions of dong during the privatization process at Cienco 1. At the conclusion of the questioning phase, the representative of the prosecution proposed sentences for the seven defendants.

The trial of 7 defendants in the case that occurred at Cienco 1 is underway.

Joint compensation of over 54.7 billion VND

Defendants Pham Dung, former Chairman of the Board of Directors of Cienco 1, and Can Hong Lai, former General Director of Cienco 1, were both recommended sentences of 9-10 years in prison for violating regulations on the management and use of state assets, causing losses and waste.

For the same charges, defendant Le Van Long, former Chief Accountant of Cienco 1, was recommended a sentence of 4-5 years in prison; Nguyen Thi Bich Hanh, Deputy Head of the Finance and Accounting Department (Cienco 1 - JSC) and Nguyen Manh Tien, former Head of the Market Planning Department (Cienco 1 - JSC), were recommended sentences of 36-42 months in prison.

The other two individuals, Nguyen Anh Tuan, an appraiser at A&C Auditing Company's Hanoi branch, and Nguyen Ngoc Tuyen, a former auditor at A&C Auditing Company's Hanoi branch, were both recommended sentences of 24-30 months in prison.

Regarding civil liability, the prosecutor's representative proposed that the two defendants, Pham Dung and Can Hong Lai, be jointly liable for compensation of over 54.7 billion VND, representing damages resulting from the incorrect valuation of four land plots owned by Cienco 1.

Regarding the debt of nearly 185 billion VND, the prosecutor stated that in March, the Ministry of Transport , the Vietnam Debt Trading Company (DATC), and Cienco 1 - JSC held a meeting and agreed that Cienco 1 - JSC would hand over this debt to DATC for acceptance.

With the money collected, Cienco 1 - JSC will return it to the state budget after the court's ruling. Therefore, the representative of the prosecutor's office requested the trial panel to accept the agreement between the parties.

The representative of the prosecutor's office holds the power of prosecution at the trial.

According to the prosecutor's assessment, the defendants' criminal acts in this case caused damage to the state budget amounting to nearly 240 billion VND, with exceptionally serious consequences.

In this case, defendant Pham Dung, in his capacity as Chairman of the Board of Directors and Head of the Enterprise Privatization Steering Committee, bore the highest responsibility for assisting the Minister of Transport in directing and organizing the privatization of Cienco 1. He directly signed decisions to handle bad debts in violation of regulations, resulting in nearly 185 billion VND being excluded from the enterprise's valuation. He also failed to direct the development of a plan for the use and reassessment of the value of four land plots, causing losses exceeding 54.7 billion VND.

Notably, in addition to the incriminating circumstances, the prosecution also noted the context of the case, as Cienco 1 was a pioneering unit in the privatization process. The defendants committed the crime out of a desire to quickly complete the privatization as directed by their superiors; they did not personally benefit or gain anything from it, so this should be considered when determining the sentence.

A series of irregularities caused hundreds of billions of dong in losses to the state budget.

According to the allegations, Cienco 1 was established in 1995. The State holds 100% of the charter capital, with the Ministry of Transport acting as the representative owner.

In 2013, the Ministry of Transport decided to approve the list of enterprises to be equitized, which included Cienco 1. The Steering Committee for the equitization of Cienco 1 was established, chaired by Mr. Pham Dung, with Mr. Can Hong Lai as vice-chairman.

In June 2013, to determine the enterprise value before privatization, the leaders of Cienco 1 held a meeting to review the accounts receivable of 50 companies, totaling over 364 billion VND.

In fact, these debts did not qualify (the debtor companies were dissolved, went bankrupt, or ceased operations), but Cienco 1 still decided to classify them as "uncollectible debts" and use its reserves to partially settle them, totaling nearly 185 billion VND.

Following the meeting, Cienco 1 General Director Can Hong Lai signed a submission (without a number) to the Board of Directors. Subsequently, the Chairman of the Board of Directors, Pham Dung, signed a request for opinions form sent to the members of the Board of Directors, and the members of the Board of Directors unanimously agreed with the proposed plan.

As a consequence, the debt of nearly 185 billion VND was not accounted for in the value of Cienco 1, was not transferred by Cienco 1 to DATC, nor was it transferred to the joint-stock company, and was not reported to the Ministry of Transport.

The group of 7 defendants were found to have committed wrongdoing in the case.

In addition to violations related to the handling of nearly 185 billion VND in debt, the defendants at Cienco 1 are also accused of causing losses in the handling of four land plots in Ho Chi Minh City and the provinces of Long An, Tien Giang , and Gia Lai.

In June 2013, in the enterprise valuation report, Cienco 1 and the auditing firm determined the value of the four land plots to be nearly 12.7 billion VND. The auditors noted that this was only a provisional value, and the state capital representative at the company needed to continue monitoring and recovering the difference in value.

However, when proposing the equitization plan, the defendants at Cienco 1 did not develop a land use plan to reassess the market value of land use rights, but only carried out procedures to hand over the land plots to the company in their current state after equitization.

The valuation concluded that the four plots of land had a total value of nearly 67.5 billion VND as of June 2013. This means the damages caused amounted to more than 54.7 billion VND.

Adding to the debt of nearly 185 billion VND that was not accounted for in the enterprise's value during the equitization process, the prosecuting authorities determined the total losses in the case to be nearly 240 billion VND.

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