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The Ultimate Anti-Corruption Penalty

Posted December 19, 2013

To emphasize the serious nature of compliance, we sometimes report accounts of punishments doled out by government agencies for contraventions of various regulatory schemes — usually stiff fines, hefty financial settlements, or in certain rare instances, even a term of imprisonment for seriously egregiously violations. Nothing however can top how the communist government of Vietnam has demonstrated its crackdown on widespread corruption…

After a four-day trial, the Hanoi People’s Court sentenced two high-ranking executives at state-run shipping company to death for embezzlement. Former Vinalines chairman Duong Chi Dung, who had fled the country but was apprehended, and the firm’s former general director, Mai Van Phuc, were convicted of stealing $476,000 each.

The two businessmen are the third and fourth corporate executives to receive the death penalty for corruption in the southeast Asian country in just the past month.

The deal that will apparently cost the two men their lives (they have two weeks to appeal) took place in 2008 and involved payoffs connected to the purchase of an obsolete, unworkable floating dock. Of the highly inflated $9 million price tag ($4 million more than the asking price), only $2.3 went to the Russian seller. A broker collected a fee of almost $4.5 million and $1.7 million kicked back to the Vinalines executives to be split among their group.

Despite the harshness of the punishment, critics inside Vietnam claim that corruption is such an integral part of the country’s system, that even death sentences won’t do the trick when it comes to curtailing corporate graft.