State shipbuilder hit in latest graft probe

The slimmed down shipbuilder continues to produce vessels for export

Two more officials have been arrested in connection with the failure of state shipbuilding giant, Vinashin, as the Communist party tries to clean up its reputation for entrenched corruption.

The former director of Vinashin, Truong Van Tuyen, and the current deputy director, Pham Thanh Son, are accused of embezzling $4.5 million in collusion with Ocean Bank, a private bank at the centre of corrupt entanglements involving officials and party bosses.

Vinashin defaulted under the weight of a $4.5 billion debt burden in 2010, a failure blamed by conservatives in the leadership on the brash freewheeling style and economic management of the former prime minister, Nguyen Tan Dung.

Since Dung was ejected from the leadership in 2016, a number of his associates have been targeted in a sprawling anti-corruption drive launched by his long term rival, the current party boss and state president, Nguyen Phu Trong.

The troubles at Vinashin, which has since been restructured with state aid, came to symbolise the greed and recklessness of a Communist party untethered from the solemn austerity of its revolutionary past.

President Trong has been attempting to win back public trust by showing that even senior figures have no immunity from prosecution.

The two Vinashin directors are accused of abusing their position and power to appropriate assets from the state firm.

Their alleged links with Ocean Bank ties the scandal back to previous corruption cases which saw dozens of bank officials jailed and links revealed with the state oil company, PetroVietnam, which has also been targeted by state and party investigators.

Vinashin was once seen as the great hope of Vietnam’s state owned corporations, an enterprise that would follow the success of South Korea and China and make Vietnam one of the world’s major ship builders.

But the company expanded recklessly into other sectors and defaulted on a $600 million loan in 2010.

Two executives of one of its subsidiaries, Vinashinlines, received death sentences for embezzlement last year.