Sixth executive at Vietnam shipbuilding firm arrested

Sep 20, 2010, 6:51 GMT

Hanoi - The chairman of a subsidiary of Vietnam's troubled state-owned shipbuilding conglomerate has been arrested, senior justice officials said Monday.

To Nghiem, 51, is chairman of the board of the Cai Lan Shipbuilding Company, a subsidiary of the Vietnam Shipbuilding Corporation (Vinashin) in the northern province of Quang Ninh.

He was arrested Saturday on charges of corruption relating to the planned construction of a power plant, according to officials in the ministries of justice and public security who asked to remain anonymous.

Nghiem is the sixth senior Vinashin official arrested in the past two months, including two former chief executives of the company.

Government inspectors say Nghiem was in charge of purchasing components for a 39-megawatt diesel-fired power plant Cai Lan Shipbuilding built between 2003 and 2007.

The newspaper Thanh Nien reported Monday that the power plant was forced to close in 2009 because the company had purchased out-of-date equipment manufactured in 1995-6. The company is unable to repay 107 billion dong (5.5 million dollars) of its bank loans.

Nghiem has been charged with 'deliberately acting against state regulations on economic management,' justice officials said.

Vinashin first ran into financial difficulties when it diversified beyond its core business and the global recession hit its revenues.

It left the company unable to keep up with its debt repayments and resulted in salary cuts for more than 70,000 employees and the dismissal of 5,000 others, the government said.

As of the end of June, Vinashin had assets worth 90 trillion dong, or about the same as its debts, the government said.

Several economists have criticized the government for offering Vinashin unjustified state support, including a 750-million-dollar state loan in 2005 financed by a bond sale.