Vietnam: Former CEO of PetroVietnam EP arrested on corruption charges

Former CEO of PetroVietnam Exploration Production, Do Van Khanh, arrested on corruption charges.

On 18 December the Ministry of Public Security prosecuted Do Van Khanh on “abusing power to appropriate property.” On 20 December Phan Van Anh Vu, the former chairman of Bac Nam 79 Construction Company was sentenced to 17 years in prison. This comes on top of a previous conviction in July 2018 where Vu was sentenced to nine years. The same day the former CEO of DongA Bank, which was implicated in the corruption case, was sentenced to life imprisonment.

Analysis

High-level crackdowns on corruption continue unabated. PetroVietnam is one of the three-largest state-owned firms and a crucial cog in the economic machinery. Vu was a well-connected businessman in Vietnam and his trials have ensnared a former deputy director general and an officer in the Ministry of Public Security General Department of Intelligence. This demonstrates that the Vietnamese authorities are probing all areas of government and business.

We expect this crackdown to continue, and our advice remains: exercise caution in dealing with local banks and entities. Thorough due diligence should be conducted as a key part of corporate risk management.

Arrest warrant out for dissident

On 5 December an arrest warrant was issued for Nguyen Van Trang, an activist associated with the “Brotherhood for Democracy” an organisation banned by the Vietnamese authorities. Trang is charged with disseminating pro-democracy materials via Facebook. On 30 November Huynh Thuc Vy, founder of the group “Vietnamese Women for Human Rights”, was sentenced to two years nine months in jail for desecrating the Vietnamese flag and posting the subsequent pictures to Facebook.

Analysis

There is increased scrutiny of social and digital media by the Vietnamese authorities and this will only intensify. Vietnam’s new cybersecurity legislation was passed in June 2018 and will be implemented as of 1 January 2019. This is a major development as the law will force technology companies to establish a local presence with sovereign data storage capability. Google has reportedly been studying the establishment of a local office.

We advise all foreign personnel to exercise a high level of caution when using social media, especially Facebook. Under no circumstances should foreign personnel comment on or post content which may be deemed even remotely political or controversial.