11-4-2024 (HANOI) A Vietnamese property tycoon has been sentenced to death for her central role in a staggering 304 trillion dong (US$12.46 billion) financial fraud case – the nation’s largest on record. Truong My Lan, the chairwoman of real estate developer Van Thinh Phat Holdings Group, was found guilty of embezzlement, bribery, and violations of banking rules after a trial that spanned five grueling weeks in Ho Chi Minh City.
A panel comprising three hand-picked jurors and two judges delivered the verdict, rejecting all defense arguments put forth by Lan. The damning statement read, “The defendant’s actions…eroded people’s trust in the leadership of the (Communist) Party and state,” underscoring the severity of her transgressions.
In addition to Lan’s fate, the trial saw 85 others face verdicts and sentencing on charges ranging from bribery and abuse of power to appropriation and violations of banking law. The sweeping investigation has exposed a web of corruption and deceit at the highest echelons of Vietnam’s business elite.
Prosecutors alleged that Lan and her accomplices siphoned off more than US$12.5 billion from Saigon Commercial Bank (SCB), an institution she effectively controlled through a network of proxies, according to investigators. From early 2018 through October 2022, when the state intervened to bail out SCB following a run on its deposits, Lan is accused of appropriating vast sums by arranging unlawful loans to shell companies.
The staggering scale of the scam has now reached unprecedented levels, with prosecutors revealing that the total damages caused amount to US$27 billion – a figure equivalent to 6 percent of Vietnam’s projected 2023 GDP. The death sentence handed down to Lan is an unusually severe punishment, even in a case of such magnitude.
The arrests and subsequent trial are part of a nationwide corruption crackdown spearheaded by Communist Party leader Nguyen Phu Trong, which has swept up numerous officials and members of Vietnam’s business elite in recent years. Lan’s apparent resignation to her fate was palpable in her final remarks to the court last week, where she was quoted by state media as saying, “In my desperation, I thought of death. I am so angry that I was stupid enough to get involved in this very fierce business environment – the banking sector – which I have little knowledge of.”
A family member confirmed to Reuters that Lan would appeal the sentence, although her lawyers were not immediately available for comment.
In the wake of Lan’s arrest in October 2022, hundreds of people took to the streets in the capital Hanoi and Ho Chi Minh City to stage protests – a relatively rare occurrence in the one-party communist state. The scandal has shocked the Southeast Asian nation, with police identifying around 42,000 victims who were defrauded.
Lan, who is married to a wealthy Hong Kong businessman also on trial, was accused of setting up fake loan applications to withdraw money from SCB, in which she owned a 90 percent stake. The victims are all SCB bondholders who have been unable to withdraw their money or receive interest or principal payments since Lan’s arrest.
As the trial unfolded, prosecutors revealed that they had seized more than 1,000 properties belonging to Lan. Additionally, authorities disclosed that the US$5.2 million allegedly given by Lan and some SCB bankers to state officials to conceal the bank’s violations and poor financial situation was the largest bribe ever recorded in Vietnam.
The woman who was offered the bribe – Do Thi Nhan, the former head of the State Bank of Vietnam’s inspection team – testified during the trial that the cash was handed to her in styrofoam boxes by the former CEO of SCB, Vo Tan Van. Upon realizing they contained money, Nhan refused the boxes, but Van declined to take them back, according to state media reports.
The far-reaching corruption crackdown has seen more than 4,400 people indicted across more than 1,700 graft cases since 2021. Last month, another high-profile case saw top Vietnamese luxury property tycoon Do Anh Dung, head of the Tan Hoang Minh group, sentenced to eight years in prison after being found guilty of cheating thousands of investors in a US$355 million bond scam.
The series of high-profile corporate arrests in 2022 triggered a US$40 billion wipeout in Vietnamese stocks, rattling investor confidence at a delicate moment for the fast-growing economy
