Trial begins for Vietnam ship scandal executives

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File photo: Vinashin shippingImage source, AFP
Image caption,
State-owned company Vinashin, established in 1996, is struggling to keep afloat

Former top officials accused of bringing one of Vietnam's largest state-owned companies to the brink of bankruptcy have gone on trial for violating regulations.

The Vietnam Shipbuilding Industry Group (Vinashin) ran up debts of up to $4.5bn (£2.9bn) due to rapid expansion, sparking investor fears in Vietnam.

Ex-chairman Pham Thanh Binh and eight others are accused of huge causing losses.

A conviction could mean 20 years' jail.

Vinashin was established in 1996 with the goal of becoming one of the world's top shipbuilders.

A court official said that the defendants, who were charged in November, "intentionally violated state regulations on economic management".

The case reportedly focuses on $43m in losses said to be linked to the purchase of ships without government approval, as well as failed power plant projects.

The trial is being held in the northern port city of Hai Phong and is expected to finish on Friday.

An international warrant has also been filed for two other executives who are not in custody.

After the scandal, agencies downgraded Vietnam's credit rating and cited Vinashin as one of the reasons. In 2010, Vinashin defaulted on its first payment on a $600m loan to creditors.

The government had said while the global economic crisis had caused the cancellation of two-thirds of ship orders, Vinashin's woes were also due to mismanagement.

Mr Binh is considered to be close to Prime Minister Nguyen Tan Dung, who appointed him to office.