Authorities in Vietnam have arrested two former heads of state-owned enterprises as a result of a seven-month investigation.

The CEO of Tan Thuan Industrial Promotion Company (IPC), Te Tri Dung, was arrested on May 14 for alleged embezzlement and “violations of regulations on the management and use of state-owned property leading to loss or wastefulness”, the VN Express reported.

And later the same day, the head of IPC-owned South Saigon Development Corporation (Sadeco), Ho Thi Thanh Phuc, was also arrested for the same charges.

Before they were arrested, Te had been suspended from his position while the authorities investigated his activities. He is accused of allegedly directly selling Sadeco shares held by IPC at cheap prices in 2017. The city allegedly incurred a loss of 153 billion dong (US$6.5 million) as a result of his actions.

In addition, the building assigned to IPC was only partly used by the company. Office space was rented out to 81 firms illegally, raking in more than 295 billion dong ($12.6 million) over a period of seven years. The company then signed up for a bank loan which incurred interest of more than 8 billion dong ($341,720).

IPC was also found to have organized overseas trips for managerial staff which were not approved by the authorities in Ho Chi Minh City. The expenditure caused the city to lose an additional 1.3 billion dong ($55,543), they said.

The maximum penalty for embezzlement in Vietnam is the death penalty.