7 bankers in the dock for lending $39M to fly-by-night Taiwanese firm

They include Do Quoc Hung, formerly director of the lender’s Thanh Do, Hanoi branch, and six managers, who are accused of approving the loan for Kenmark, a subsidiary of Kenmark Industrial, for building an industrial park in the northern province of Hai Duong in 2008 despite being aware the company did not meet financial requirements.

According to prosecutors, Kenmark did not have an office in Vietnam and was rated “high risk” by the Credit Information Center, which assesses the credit worthiness of all individuals and organizations in Vietnam.

State Bank of Vietnam inspectors had highlighted the poor capacity of the company and lack of transparency in its operations, and Hung was aware of their assessment, the indictment says.

He lent Kenmark $39 million in 2008-10 while and Habubank and SHB lent another $28 million.

The three banks disbursed more than $54 million for Kenmark between February 2008 and May 2010.

In June 2010 Kenmark said it was suspending operations and its representative left Vietnam.

By then it had only finished the technical infrastructure for 13 out of 27 factories it had proposed to build in the industrial park.

It still owes more than VND360 billion ($15.27 million), including more than VND180 billion to BIDV.

During the investigation, the other two banks have managed to recover the loans they gave Kenmark and so their officials are not facing criminal charges.

The trial is expected to go on for three days.