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Vietnam arrests four more at failing shipbuilder
September 3, 2010 / 11:51 AM / 7 years ago

Vietnam arrests four more at failing shipbuilder

HANOI, Sept 3 (Reuters) - Vietnamese police have arrested four more people linked to the debt-laden state ship-builder Vinashin, expanding a case that is widely seen as having political implications in the run up to a leadership reshuffle.

Among those arrested on Friday were Tran Quang Vu, a board member who was appointed head of the failing and overstretched conglomerate after the government sacked his predecessor in July and ordered the firm reorganised.

Also arrested were Tran Van Liem, another former member of the management board, as well as Nguyen Van Tuyen and Nguyen Tuan Duong, who were former CEOs of subsidiaries of Vinashin, or Vietnam Shipbuilding Industry Group.

Prime Minister Nguyen Tan Dung has been a champion of Vietnam’s state-run conglomerates and a backer of Vinashin, and analysts speculate that the public takedown of the shipbuilder is linked to politicking ahead of an important Communist Party conclave in early 2011. <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^

For a FACTBOX on key political risks in Vietnam, click [ID:nRISKVN] or r.reuters.com/mav92n ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>

Several members of the powerful 15-man Politburo are expected to retire or be reshuffled at the 11th Party Congress in January next year and the fate of Dung, who is young enough to stay on, remains one of the biggest questions, analysts say.

“The chickens are coming home to roost, for lack of good governance, lack of control ... and it’s put Vietnam’s prestige on the line,” said Carlyle Thayer, a Vietnam specialist at the University of New South Wales.

The government, headed by Dung, has been in charge of the re-organisation and arrests, but Thayer said he thought they could be a “pre-emptive strike” to limit the damage to Dung.

“There’s probably a network out there that they’re going to unravel and they’ve got to decide how far and where it goes.”

The four men were suspected of having "committed actions that are against the laws on economic management, which resulted in especially serious consequences", a statement by the Ministry of Public Security said on the government's website, www.chinhphu.vn.

It said clues had been uncovered in the investigation into Vinashin’s long-time CEO Pham Thanh Binh, who was arrested early last month.

The Vinashin case could yet have implications for the economy. Government documents show that Vinashin amassed debts worth about $4.5 billion.

Earlier this week Fitch cut its rating of Vietcombank VCB.HM, the country’s second biggest partly private lender in terms of assets and a pillar of the financial system, and said it “could potentially be hit” by its exposure to Vinashin, which was 16 percent of equity.

Fitch also affirmed its rating for Bank for Investment and Development of Vietnam (BIDV), the country’s second biggest state-owned bank by assets, but gave a similar warning about non-performing loans and Vinashin exposure.

BIDV had yet to disclose the extent of its exposure, Fitch said. (Editing by Alex Richardson)

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