A court in Vietnam has imprisoned nine executives of a prominent state-owned shipbuilding company to sentences ranging from three to 20 years in connection with a corruption scandal, according to reports.

Pham Thanh Binh, 58, the former chairman of Vietnam Shipbuilding Industry Group (Vinashin) received twenty years in jail (the maximum term possible) for violating state regulations.

Vinashin almost collapsed under a mountain of debt totaling about $4.5 billion.

BBC reported that the nine executives were directly linked to $43 million in losses, incurred through the purchase of ships in the absence of government approval, as well as two failed power plant projects.

In 2010, Vinashin defaulted on a $600-million loan to creditors, while foreign credit ratings agencies cited the Vinashin fiasco as one reason they downgraded Vietnam’s debt rating that same year.

The scandal even touched the country’s Prime Minister Nguyen Tan Dung, who appointed Binh to his post.

In addition, the saga raised serious questions about Vietnam's corporate governance and the debt situation of the dominant state sector in the country.

Tran Van Nghiem, the presiding judge of the court in the northern city of Haiphong, said in a statement:This case caused serious economic consequences. The behavior of Binh and the other defendants was very dangerous, damaging public opinion, reducing public trust and the prestige of the country in the eyes of foreign investors and resulting in stagnant business and production that forced the government to appoint a new management.”

Nghiem added: Therefore, the defendants should be seriously punished.

Meanwhile, the disaster at Vinashin has led state officials to promise they will reform the state sector and restructure the economy.

Reuters noted that last week the Vietnamese finance ministry retained Standard Chartered Bank to advise on how to upgrade the country’s debt rating.

The government's reform strategy does not appear to give priority to tightening corporate governance or increasing transparency. The market also does not appear to be punishing Vietnam for Vinashin's default, Jonathan Pincus, Dean of the Fulbright Economics Teaching Program in Ho Chi Minh City, told Reuters.