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1. What is Vietnam targeting?
Trong, who won a rare third term last year, said in a televised address that “every cadre and party member must take responsibility to be a role model. The higher the position and rank, the more responsibility one has to assume. Eight inspection teams have been set up to deal with corruption cases, including in party committees and agencies, according to the Central Anti-Corruption Steering Committee. In meetings with voters in Hanoi in October, he claimed the fight was continuing, with more cases to come, state broadcaster VTV reported.
2. Who is in the crosshairs?
In the first six months of 2022, 295 party members were disciplined for corruption and deliberate wrongdoing, according to a posting on the party’s website. During the same period, criminal charges were filed in 297 cases against 682 people for alleged corruption, and more than 9 trillion dong ($371 million) were recovered. Police have also arrested a number of executives in connection with investigations into suspected fraud related to the issuance and trading of corporate bonds and the manipulation of stock prices. For instance:
• In October, police arrested Truong My Lan, chairwoman of real estate conglomerate Van Thinh Phat Holdings Group, and three other company officials for alleged fraud involving the issuance and trading of corporate bonds. The detention led to a brief run on the private commercial bank in Saigon over its alleged links to the Van Thinh Phat group. Regulators placed the bank under “special scrutiny” and asked four other people to help run it.
• In June, police arrested former Health Minister Nguyen Thanh Long and former Hanoi Mayor Chu Ngoc Anh for alleged links to corruption and abuse of power investigations involving Viet A Technology JSC, the manufacturer of the Covid-19 test kits. Officials have filed criminal charges against 89 people linked to the case, according to the Ministry of Public Security.
• A former deputy health minister was sentenced in May to four years in prison for his role in a counterfeit medicine trafficking ring.
• The Ministry of Finance fired the Chairman of the State Securities Commission, Tran Van Dung, in May for alleged “serious wrongdoing” in an ongoing stock market investigation. Shortly after, the director of the Ho Chi Minh City stock exchange was fired for what the Vietnam Stock Exchange described as “very serious” shortcomings. Among the executives detained are the former chairman of Bamboo Airways and its parent company FLC Group JSC, Trinh Van Quyet; Do Duc Nam, former CEO of Tri Viet Securities, and Do Thanh Nhan, former chairman of Louis Holdings.
• In April, police arrested Deputy Foreign Minister To Anh Dung for alleged corruption while arranging repatriation flights for Vietnamese overseas during the pandemic. An assistant to the deputy prime minister and a director of the government office’s international relations department were also arrested.
• Prime Minister Pham Minh Chinh in April ordered ministries to step up oversight of the corporate bond market amid the detention of Tan Hoang Minh Group Chairman Do Anh Dung and six other corporate executives for investigation of suspected fraud. Dung and his allies allegedly appropriated more than 8 trillion dong from more than 6,000 investors through the issuance of corporate bonds, according to the Ministry of Public Security.
Vietnam has warned corruption could jeopardize the party’s legitimacy and continued power as the public grows increasingly intolerant of corruption – echoing President Xi Jinping in neighboring communist China. Apart from that, Vietnam, a country of about 100 million people, has a lot to gain economically if it can boost its image as a place to do business. Global manufacturers have explored ways to diversify their supply chains away from China, which has been caught up in pandemic lockdowns and a trade war with the United States, and Vietnam has taken advantage. Its exports are equivalent to more than 100% of GDP, according to World Bank data, making it one of the most trade-dependent countries in the world. Vietnam has also sought to have its stock market categorized as an emerging market — compared to the current frontier status, which is the lowest and riskiest tier — and that could attract more foreign investment. As a participant in the United States’ new Indo-Pacific economic framework, Vietnam also has the opportunity to increase ties with its former wartime enemy, its biggest export market.
4. How serious is the repression?
People are in prison and some have been sentenced to death. But in Vietnam’s tightly controlled one-party state, it’s hard to tell if there’s any other motivation beyond building legitimacy. Freedom House, a US-based advocacy group, classifies Vietnam as “not free”, with a score last year of just 19 out of 100 points. Human rights groups repeatedly accuse the government to suppress dissent. Transparency International, a Berlin-based anti-corruption group, gave it a score of 39 out of 100 last year, down from 31 in 2012 – the year Prime Minister Nguyen Tan Dung’s government was marred by a series of scandals. Arrests resumed after a new administration came to power in 2016:
• Nguyen Xuan Anh, party leader in the central city of Danang, was removed from office.
• Nguyen Xuan Son, former chairman of state-owned PetroVietnam and former managing director of Ocean Commercial Joint Stock Bank, was sentenced to death after being found guilty of embezzlement.
• Ha Van Tham, the bank’s former president, was sentenced to life after being found guilty on the same charges.
• Former Politburo member Dinh La Thang, another former chairman of PetroVietnam, was sentenced in 2018 to 18 years for violating state regulations.
In 2021, the anti-corruption committee sanctioned 618 party members for “corruption or intentional misconduct”. It also reported prosecuting 390 corruption cases and recovering at least $400 million in assets.
The campaign shows no signs of slowing down. Anti-corruption steering committees have been formed and are functioning in every city and province, and the Party leader, in a speech in August, urged officials to be persistent and determined, given the “serious” corruption in some sectors and localities, according to the government website. Trong also ordered that trials in some major cases be moved faster. Chinh, the prime minister, called in October for the anti-corruption campaign to be more drastic and effective, according to another statement posted on the government’s website. Earlier, Tran Khanh Hien, head of research at VnDirect Securities Corp., said the measures taken by the government had boosted the confidence of foreign investors. But she added that they would like to see “how persistent and serious the authorities are”.
(Updates with the latest investigations and arrests)
More stories like this are available at bloomberg.com
