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BOGUS COMPANIES AND PUPPET DIRECTORS IN THE CASE OF PHAM CONG DANH

Monday 23, 01 2017
Of 36 arrestees in the case of Pham Cong Danh (Director of Vietnam Construction Bank - VNCB), there are 12 puppet directors of bogus companies owned by Thien Thanh Group, of which Pham Cong Danh holds 80% equity. They are security guards, motorcycle
BOGUS COMPANIES AND PUPPET DIRECTORS IN THE CASE OF PHAM CONG DANH

Of 36 arrestees in the case of Pham Cong Danh (Director of Vietnam Construction Bank - VNCB), there are 12 puppet directors of bogus companies owned by Thien Thanh Group, of which Pham Cong Danh holds 80% equity. They are security guards, motorcycle taxi drivers, car washers or cleaners … who were hired by Pham Cong Danh and Pham Cong Trung as directors.

Directors sign blank paper?!

“I was asked to go to Ho Chi Minh City to sign loan documents and was taken by motorcycle taxi without knowing where to go.  Then they told me to sign a lot of blank sheets of paper. Now that I know I have caused VND 152 billion loss, I feel so guilt ridden” stated Nguyen Tan Thanh – Director of Thanh Tri Commercial Building Service Ltd. Co, Thien Thanh Group at the hearing on July 26, 2016, of the case of VND 9000 billion loss of VNBC.

According to the indictment, Danh has used 12 legal people of Thien Thanh Group together with 2 legal people from Quoc Cuong Gia Lai to generate fake loan agreements worth VND 5000 billion (with VND 300 billion settled). Danh has directed his staff to establish fake sale and purchase contracts between 12 companies of Thien Thanh Group and other 29 companies to demonstrate the business plan of loan applications.

All 12 puppet directors are from Quang Ngai (Pham Cong Danh hometown). They informed that Pham Cong Trung (Pham Cong Danh’s brother) directly asked them to be directors. He gathered their information then asked them to sign business establishment documents. All of these directors are security guards, motorcycle taxi drivers, car washers or cleaners… without qualifications to be directors and do not take part in running the business.  The “directors” have also stated that they had no idea of what the companies are trading and the content of the documents they signed. All they did was to sign. The seal was held by Thanh Thien Group. Some of the puppet directors are spouses to each other, for instance Ho Thi Di and Nguyen Thinh Quoc, Nguyen An Vinh and Bui Thi Thu Ha… Their monthly wage is ranged from VND 5 to 10 million.

Pham Cong Danh still denied his crime at the appeal hearing on Jan 6.

Bogus Companies and Puppet Directors: not a rare phenomenon

“Bogus companies” directed by “puppet directors” are not rare. In late 2008, it was reported that in a village with 1200 residents of An Hoa commune, An Duong district, Hai Phong, there were 400 directors. They all were peasants or even people who had been laid up for years. All that is needed to become a director with monthly salary of VND 10 billion are an identity card and a family record book. After things were revealed, more than 200 puppet directors ran away.

Answering questions of the People's Council of Hanoi on the business tax debt and business decamping, Mr. Ha Minh Hai, Director of the Hanoi Tax Department said most of these directors are security guards, motorcycle taxi drivers and unskilled workers. "One is a motorbike taxi driver. One is in prison. The other has lost their ID card. The criminalization of these people is very difficult" Hai said.

>>> How to check the legitimation of business registration in Vietnam?

-Compiled by VietnamCredit-

Categories:
Financial News

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