Defendants at the hearing court on Monday. — VNA/VNS Photo

HÀ NỘI — Hà Nội’s People’s Court on Monday morning opened the first instance trial of 19 people accused of violations at the Thái Nguyên Steel and Iron Corporation (Tisco).

The defendants, who are former executives and officials of the corporations, are on trial for criminal offences during the implementation of the second phase of the corporation’s production expansion project.

Fourteen are charged with offences against regulations on management and use of State-owned property that lead to losses and wastefulness, under Clause 3 of Article 360 in the 2015 Penal Code.

They include Trần Trọng Mừng, former Tisco general director; Mai Văn Tinh, former chairman of the Board of Directors of the Vietnam Steel Corporation (VNS); Trần Văn Khâm, former chairman of the Board of Directors and general director of Tisco; and Đậu Văn Hùng, former general director of VNS.

Five others – two are former members of the VNS Board of Directors and three are former members of the Tisco Board of Directors – are charged with lacking responsibilities and causing serious consequences as stated in the penal code.

Đậu Văn Hùng asked for to be absent at the court due to terminal illnesses.

According to the indictment issued by the Supreme People’s Procuracy, the VNS Board of Directors decided the investment in the second-phase production expansion project of Tisco and Tisco was the investor of the project.

This project initially had total investment of more than VND3.8 trillion (US$164.9 million). The China Metallurgical Group Corporation (MCC) won the construction bid in 2007.

On July 12, 2007, then TISCO general director Trần Trọng Mừng and MCC general director Shen Heting signed an engineering, procurement, and construction (EPC) contract worth over $160 million (equivalent to over VND3.5 trillion). The value, including taxes and expenses necessary for contract implementation, was stipulated not to change during the implementation process.

Tisco and MCC launched the implementation on September 29, 2007. However, after more than 11 months since the contract took effect, MCC still failed to select or contract with subcontractors, or carry out the EPC contract. Instead, it proposed extending the contract implementation duration and raising the contract value by more than $138 million.

The indictment said that although the related 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, revoke the advance, or report 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, TISCO general director Mung held the overall responsibility for the project’s effectiveness while VNS chairman Mai Văn Tinh was in charge of approving and directing the project implementation.

The Supreme People’s Procuracy held that the violations of rules on the management of State assets and the lack of sense of responsibility by those at TISCO and VNS have 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 lagging behind schedule, on May 31, 2011, to the date an official investigation was launched, on April 18, 2019.

The first-instance trial is expected to last 10 days. — VNS