ECONOMYNEXT – Politically connected persons who declare commitments to address various types of economic crimes, often during election cycles, have vested interests in institutions that investigate and prosecute economic crimes, a recent study by the Centre for Policy Alternatives (CPA) has found.

“Therefore, once these political elites are in office, they are often reluctant to invest in building capacities as any form of institutional strengthening could lead to their private gains being investigated as well.”

The study, Understanding Connections between Human Rights and Economic Crimes, combines the findings on key informant interviews (KIIs), and analysis of the challenges to the country’s efforts to combat corruption and ensure accountability within its governance framework.

“The key impediment to setting up a powerful, independent investigative and prosecutorial arm to address economic crimes is a direct result of the lack of commitment to capacitate and invest in existing institutional structures,” the study said.

The study further broke down the reasons for the continuous deliberate attempts to dismantle structures of accountability to address economic crimes in Sri Lanka as; vested interests in institutions, concerns regarding independence and integrity, and deliberate attempts to dismantle systems of accountability.

On institutional structures’ integrity and independence, the study found that combating economic crimes presents a challenge to the independence and integrity of institutional structures.

“Fundamental concerns regarding the impartiality and transparency of investigations exist, particularly as to what extent these inquiries are conducted without external interference. This also relates to a range of other issues such as securing the resourcing for any establishment/s to carry out independent investigations and prosecutions as well as investing in obtaining specialist knowledge,” the study found.

The skills, specialisation, and technical proficiency gaps between investigators and prosecutors are substantial, as this investigation found, particularly when it comes to handling intricate matters like economic crimes.

Even though there had been attempts to enhance the capacities of investigators in the past, such efforts have also been “deliberately undermined”.

“For example, the immediate transfer of the 60 officers, who were trained to investigate financial crimes under the former Financial Crimes Investigative Division (FCID), to other unrelated tasks evinces the deliberate obstruction of the efficiency and effectiveness of investigations.” (Colombo/Apr12/2024)

ECONOMYNEXT – A court in Vietnam has sentenced to death Truong My Lan, head of Van Thinh Phat property group who was also involved in restructuring a troubled bank, while sentencing three others to life imprisonment, including a central bank supervisor.

Lan, who was also a key shareholder of Saigon Commercial Bank, was sentenced to 20 years in prison for violating credit regulations, 20 years for bribing a State Bank of Vietnam (central bank) official, in addition to the death penalty, penalty for embezzlement, reports said.

Do Thi Nhan, former Director of bank supervision division II at the State Bank of Vietnam was sentenced to life for accepting bribes during a re-structure of three failed banks over a decade ago, which eventually emerged as Saigon Commercial Bank.

Vietnam suffered business failures and bad loans after an attempt at ‘stimulus’, which was fashionable after a US housing bubble broke, ended in a currency crisis in 2011 with the dong falling from 15,000 to 22,000 to the US dollar.

Lan protested her innocence, saying she invested in the bank and got friends to buy shares to bail it out at the behest of authorities, reports said.

Dinh Van Thanh, exp-Chairman of Saigon Commercial Bank, currently evading arrest, Bui Anh Dung, Chairman of the Board of Directors; Vo Tan Hoang Van, General Director were also sentenced to life imprisonment.

The current case blew up after property companies in Van Thinh Phat Group defaulted on corporate bonds issued during a Covid low interest period, leading to public protests, after rates were hiked in late 2022 to stop a currency crisis.

Several Vietnamese property firms got into trouble in 2022 after construction delays during Covid-19 which led to interest rate accumulation, delayed payments by buyers, and an eventual rate correction to stop a currency crisis in 2022, after forex reserves touched three months of imports due to rate cuts.

Court asked authorities to investigate corporate bond sales separately, as the current case dealt with loans from the Saigon Commercial Bank.

On March 27, Do Anh Dung, Chairman of Tan Hoang Minh group, was sentenced to eight years in prison, his son and Deputy General Manager Do Hoang Viet to three years by Hanoi People’s Court over corporate bond defaults, also over defaulted corporate bonds.

In the SCB case, the court also sentenced a series of central bank, credit regulatory agency and state audit office and government internal affairs officials for failure to carry out their work or negligence.

Court also recommended additional investigation of auditors of Saigon Commercial Bank, the government to re-examine the procedures for setting up joint stock companies (limited liability firms) after it was found that over 1000 companies had been incorporated with cross-holdings to get loans, some of which were inactive.

In all 86 persons were sentenced.

Court said Lan could appeal to the President of the Republic for the sentence to be commuted to life.

In 2003, Tang Minh Phung, director of Minh Phung and EPCO groups was sentenced to death after his businesses failed and could not repay loans from state banks.

His appeal was rejected by the President and he was executed by firing squad.

A pioneer exporter in footware and apparel in the early stage of Vietnam’s growth story, Phung was also bought down by property deals gone bad.

The following Central Bank and other state officials were sentenced in addition to Do Thin Nhan according to ThanhNhien portal.

1) Nguyen Van Hung, former Deputy Chief Inspector in charge of the Banking Inspection and Supervision Agency (under the State Bank), received 390,000 USD from Truong My Lan: 11 years in prison (translated)

2) Nguyen Thi Phung, Deputy Director of Banking Inspection and Supervision Department II, received 20,000 USD, 210 million VND, 1 watch, 1 bag, 1 scarf: 4 years in prison

3) Bui Tuan Khoa, Deputy Director of Banking Inspection and Supervision Department II, received 100 million VND: 3 years in prison

4) Vuong Do Anh Tuan, Head of the Inspection Department of the Banking Inspection and Supervision Department II received 20,000 USD, 2 shirts: 3 years suspended prison term

5) Tran Van Tuan, Inspector of the Department of Inspection, resolution of complaints and denunciations of the internal affairs and general economic sector (under the Government Inspectorate) received 6,000 USD, 40 million VND: 3 years in prison

6) Le Thanh Ha, Deputy Chief Inspector of State Audit, former Head of Bank Audit Department 1, State Audit Specialist VII received 14,000 USD, 100 million VND: 3 years in prison

7) Nguyen Van Thuy, former Deputy Head of the General Supervision Department, National Financial Supervision Commission received 21,000 USD, 60 million VND, 1 shirt, 1 T-shirt, 1 box of bird’s nest: 3 years in prison

8) Nguyen Tuan Anh, former civil servant of the Department of Inspection and Supervision of Domestic Credit Institutions (under the Banking Inspection and Supervision Agency, State Bank) received 100 million VND: 3 years in prison

9) Vu Khanh Linh, Deputy Head of the Joint Stock Commercial Bank Inspection Department (under the Department of Banking Inspection and Supervision II, State Bank) received 100 million VND: 3 years of suspended prison sentence

10) Truong Viet Hung, inspector of the Department of Inspection, resolution of complaints and denunciations of the internal affairs and general economic sector (under the Government Inspectorate) received 6,000 USD: 3 years in prison

11) Nguyen Duy Phuong, inspector of the Department of Inspection, settlement of complaints and denunciations of the internal affairs and general economic sector received 1,000 USD, 20 million VND: 2 years in prison

12) Nguyen Van Dung, Deputy Director of the State Bank Ho Chi Minh City branch received 400 million VND, 15,000 USD: 11 years in prison

13) Nguyen Thi Phi Loan, former Deputy Chief Inspector in charge of the State Bank’s Ho Chi Minh City Branch Inspection and Supervision Agency, received 470 million VND: 4 years in prison

14) Phan Tan Trung, Deputy Chief Inspector, Banking Supervisor, State Bank Ho Chi Minh City Branch received 1.1 billion VND: 7 years in prison

15) Vo Van Thuan, Deputy Chief Inspector, Banking Supervisor, State Bank Ho Chi Minh City Branch received 1.8 billion VND: 7 years in prison

16) Nguyen Tin, former Deputy Head of the Administrative Inspection Department, resolving complaints and denunciations and preventing corruption, Ho Chi Minh City Banking Inspection and Supervision Department under the State Bank of Vietnam Banking Inspection and Supervision Agency Receive 500 million VND: 3 years in prison (Colombo/Apr12/2024)

ECONOMYNEXT – A shortage of drugs due to the Yukthiya crackdown has led some addicts to look for alternative medicines, State Minister of Indigenous Medicine Sisira Jayakody said.

“The shortage of pharmaceuticals has led some individuals addicted to drugs to turn to certain alternative medicines within the indigenous medical system, Jayakody said at a press briefing last week.

Sri Lanka allows cannabis to be used in the manufacture of ayurvedic medicine. Raw materials in Ayurvedic medicine include several parts of the cannabis plant, as well as abin (Papaver somniferum Linn), in herbal remedies.

Anecdotal evidence suggests that over-the-counter products available at shops that sell ayurveda products (sinhala beheth) provide varying degrees of relaxation or stimulation.

Jayakody said a written notification has been sent to Public Security Minister Tiran Alles and the Inspector General of Police regarding the challenges faced by the indigenous medical sector due to operation ‘Yukthiya’.

“Nevertheless, we have urged them to allocate space for uninterrupted production of indigenous medicines.”

Jayakody said a special unit has also been set up to address issues faced by traditional medical practitioners, and to safeguard the indigenous medicine system.

The island nation’s latest drug-busting Yukthiya programme has been widely criticized by local and international rights groups citing it was violating the human rights of suspected drug users. (Colombo/Apr12/2024)