HO CHI MINH CITY (The Thursday Times) — In a landmark ruling from Ho Chi Minh City, Truong My Lan, a prominent figure in the real estate sector, received a death sentence for her involvement in Vietnam’s biggest-ever financial scandal.
At 67, Lan, who presides over the Van Thinh Phat real estate conglomerate, faced charges for orchestrating a fraud that escalated to $27 billion, a figure that represents nearly 6% of Vietnam’s GDP for 2022.
Lan manipulated the Saigon Joint Stock Commercial Bank from 2012 to 2022, during which she facilitated approximately 2,500 dubious loans, culminating in a staggering $27 billion loss for the bank. The court has mandated her to pay $26.9 million in compensation.
Despite this being her first offense and her engagement in philanthropic efforts, the severity of Lan’s actions led to the ultimate penalty. The court highlighted her central role in a highly complex criminal network that had far-reaching and irreversible impacts. Her fraudulent activities not only undermined property rights but also compromised the Saigon Joint Stock Commercial Bank (SCB), shaking public confidence in the governance of the Party and State.
Truong Hue Van, Lan’s niece and CEO of Van Thinh Phat, received a 17-year prison sentence for her complicity.
The establishment of Van Thinh Phat in 1992 marked a significant turn in Lan’s career trajectory, aligning with Vietnam’s shift towards a market-oriented economy. Lan’s early endeavors included assisting her mother in cosmetic sales in one of Ho Chi Minh City’s oldest markets. The company would eventually emerge as a powerhouse in Vietnam’s real estate landscape, spearheading various high-end projects.
Lan was implicated in exploiting her significant influence over SCB, despite her denials of owning more than 90% of the bank. Her approval of loans to non-existent companies, which ultimately redirected funds back to her, was a tactic highlighted by the government. This was accompanied by allegations of her bribing officials to conceal her schemes.
Additionally, Do Thi Nhan, a former central bank official, was sentenced to life imprisonment for accepting bribes amounting to $5.2 million.
Lan’s arrest in October 2022 was a highlight in Vietnam’s intensified anti-corruption efforts, notably the Blazing Furnace campaign, which has implicated several high-ranking officials, including the resignation of former President Vo Van Thuong in March.
The revelation of the fraud has caused nationwide concern, prompting speculation about the integrity of other financial institutions and impacting Vietnam’s appeal to foreign investors. The real estate market, in particular, has faced turmoil, with a significant withdrawal of property firms in 2023 and a decline in commercial rents, despite various incentives to attract buyers.
The ongoing anti-corruption initiative, led by Communist Party General Secretary Nguyen Phu Trong, is set to be a persistent feature of Vietnam’s political landscape.
