Former TISCO leader faces up to 11 years in jail
A prison term of 10-11 years has been proposed for Tran Trong Mung, former General Director of the Thai Nguyen Iron and Steel JSC (TISCO), with the main role in wrongdoings at the company, during the ongoing first-instance trial held by the Hanoi People’s Court.
On April 14, a representative of the Supreme People's Procuracy presented the case and recommended sentences for each defendant.
Fourteen defendants were charged with “violating regulations on the management and use of State assets, causing losses and wastefulness” under Clause 3 of Article 360 in the 2015 Penal Code.
They included Tran Trong Mung (born in 1949), Tran Van Kham (born in 1961 and former Chairman of the Board of Directors and General Director of TISCO), Mai Van Tinh (born in 1952 and former Chairman of Vietnam Steel Corporation (VNS)’s Board of Directors), and Dau Van Hung (born in 1951 and former General Director of VNS).
Two former members of the VNS Board of Directors and three former members of TISCO’s Board of Directors were accused of “lacking a sense of responsibility, causing serious consequences” under Clause 3 of Article 360 in the 2015 Penal Code.
According to the indictment issued by the Supreme People’s Procuracy, the VNS Board of Directors decided to invest in the second phase of TISCO’s production expansion project, and TISCO was the investor of the project.
This project initially had total investment of more than VND3.8 trillion (US$164.9 million at the current exchange rate). The China Metallurgical Group Corporation (MCC) won the construction bid in 2007.
On July 12, 2007, then TISCO General Director Tran Trong Mung and MCC General Director Shen Heting signed an engineering, procurement, and construction (EPC) contract worth over US$160 million (equivalent to over US$3.5 trillion). It was stipulated that the value, including taxes and expenses necessary for contract implementation, was to not change during the implementation process.
TISCO and MCC launched implementation on September 29, 2007. However, more than 11 months after the contract took effect, MCC had failed to select or sign contracts with subcontractors, or carry out the EPC contract. Instead, it proposed extending the contract implementation duration and raising the contract value by more than US$138 million.
The indictment said that although individuals at TISCO and VNS were aware that MCC had infringed the contract and groundlessly proposed the implementation extension and value hike, they did not consider contract termination, revocation of the advance, or reporting the matter to competent persons to abolish the bidding result and re-organise the bidding process so as to ensure the project’s effectiveness and progress.
Among the defendants, Mung held the overall responsibility for the project’s effectiveness while Tinh was in charge of approving and directing project implementation.
The Supreme People’s Procuracy held that the violations of rules on the management of State assets and the lack of a sense of responsibility by those at TISCO and VNS caused losses of over VND830 billion to the State. The sum is the interest rate TISCO had to pay to banks for the period from the time the project began falling behind schedule, on May 31, 2011, to the date an official investigation was launched, on April 18, 2019.
The defendants’ criminal acts not only adversely affected economic development and had a direct negative impact on production and business activities and the interests of employees at TISCO, they also indirectly affected the process of promoting rapid and sustainable economic development, becoming a burden on the national economy and causing a loss of trust in society.
On April 15, the trial continued with debates between lawyers, defendants, and representatives of the Procuracy.