A Vietnamese court sentenced property tycoon Truong My Lan to death on Thursday in a bank fraud case that prosecutors say caused $27 billion in damages.
Lan, chair of the developer Van Thinh Phat, was found guilty of swindling cash out of Saigon Commercial Bank (SCB) over a decade. At the trial in Ho Chi Minh City, a panel of two judges and three jurors rejected every defense argument. “The defendant’s actions… eroded people’s trust in the leadership of the (Communist) Party and state,” the verdict said. Lan denied the charges and blamed her subordinates. After a five-week trial, 85 others also face verdicts on charges that range from bribery and abuse of power to appropriation and violations of banking law.
Two figures, one case
The numbers differ depending on what is counted. Lan embezzled $12.5 billion, prosecutors said, but they now put the total damage at $27 billion, equal to six percent of Vietnam’s 2023 GDP. Fortune, citing the Vietnamese outlet VN Express, reported that she was convicted of taking out $44 billion in loans from the bank between 2012 and 2022, more than 93% of its lending in that period. The verdict requires her to return $27 billion, a sum above the market value of most Vietnamese banks.
Police say she set up fake loan applications to pull money out of SCB, where she held a 90% stake. Her lawyers argued she controlled only about 15% and had no official position after a 2011 merger. The judges found she held more than 90% through proxies.
Police have identified around 42,000 victims, all of them SCB bondholders who cannot withdraw their money and have received no interest or principal since Lan’s arrest in October 2022. Fortune reported that the case set off a run on the bank, and the State Bank of Vietnam took control of the lender. Hundreds of people protested in Hanoi and Ho Chi Minh City after the arrest, which is rare in a one-party state. Prosecutors told the trial they had seized more than 1,000 properties belonging to Lan. Her husband, a wealthy Hong Kong businessman, is also on trial.
The bribe and the final words
Authorities say $5.2 million allegedly given by Lan and some SCB bankers to state officials, to hide the bank’s violations and poor finances, is the largest bribe ever recorded in Vietnam. Do Thi Nhan, the former head of the State Bank of Vietnam’s inspection team, told the court that the former SCB chief executive, Vo Tan Van, handed her the cash in Styrofoam boxes. She refused them once she realized what was inside, she said, but Van would not take them back, state media reported.
In her final remarks last week, Lan appeared to say she had thought of suicide. “In my desperation, I thought of death,” she said, according to state media. “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 rare punishment
A death sentence is unusually severe for a case like this. Vietnam allows capital punishment for 22 offenses, among them economic crimes such as graft, corruption, fraud and embezzlement, but Amnesty International says most death sentences there are for drug crimes. One of the few earlier death sentences for corruption came in 2013, when two former executives of Vietnam National Shipping Lines were convicted of embezzlement.
The case sits inside a campaign Communist Party Secretary Nguyen Phu Trong has led since 2016, which the party calls the “blazing furnace”. More than 4,400 people have been indicted in over 1,700 graft cases since 2021. Last month Do Anh Dung, head of the Tan Hoang Minh group, was sentenced to eight years in prison for cheating thousands of investors in a $355 million bond scam.
Sources
- Vietnam property tycoon sentenced to death in $27 billion fraud case
- Vietnam’s ‘blazing furnace’ sees real estate mogul sentenced to death for $12 billion fraud. It’s the biggest eruption yet in Asia’s volcanic housing bust | Fortune
- Vietnam property tycoon Truong My Lan sentenced to death in whopping $27 billion fraud case
