The Vietnamese billionaire Truong My Lan was sentenced to death for her involvement in the country’s biggest financial fraud case. The dramatic development was reported by the state media outlet Thanh Nien.
Lan’s arrest and the scale of her fraud has sent shockwaves through Vietnam’s business community.
Lan, 67, Vietnamese real estate tycoon and the chairwoman of Van Thinh Phat Group that developed luxury apartments, hotels, offices and shopping malls, was arrested in 2022 and eventually faced charges including bribery of government officials and violation of bank lending rules.
The main case against her was that she embezzled funds from Saigon Commercial Bank (SCB) between February 2018 and October 2022.
The 67-year-old has been convicted for fraud amounting to $12.5 billion — nearly 3% of the country’s 2022 GDP — and for illegally controlling a major bank and allowing loans that resulted in losses of $27 billion, state media outlets reported.
Who is Truong My Lan?
Born in 1956, Lan initially ventured into selling cosmetics alongside her mother, a Chinese entrepreneur, at Ho Chi Minh City’s oldest market. In 1992, the same year she married, Lan established her real estate company, Van Thinh Phat (VTP).
VTP flourished following Vietnam’s transition to a market-oriented economy in 1992, eventually becoming one of the country’s wealthiest real estate firms. Today, VTP is associated with prominent downtown properties in Ho Chi Minh City, including the 39-story Times Square Saigon, five-star Windsor Plaza Hotel, the 37-story Capital Place office building, and Sherwood Residence hotel, where Lan resided until her arrest.
Accusations and death sentence
Lan was involved in the 2011 merger of the struggling Saigon Joint Commercial Bank (SCB) with two other banks, under the oversight of Vietnam’s central bank. She is accused of using the bank as her cash cow, using thousands of “ghost companies” in Vietnam and abroad to give loans to herself and her allies, according to government documents. The loans resulted in losses of $27 billion, state media VnExpress reported.
The court sentenced her to death, saying her actions “not only violate the property management rights of individuals but also pushed SCB into a state of special control, eroding people’s trust in the leadership of the (Communist) party and state.”
Las was sentenced to death for the embezzlement charge and to 20 years each for the other two charges of bribery and violations of banking regulations.
Lan had pleaded not guilty to the embezzlement and bribery charges. “Of course she will appeal the verdict,” Nguyen Huy Thiep, one of Lan’s lawyers, told Reuters.
The property tycoon denied all charges and instead blame subordinates. In her final remarks to the court last week, she said she had thoughts 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.” She also asked the court for leniency for her husband, a Hong Kong businessman, and niece who were on trial as accomplices.
Truong My Lan had been tried alongside 85 others, including former central bankers and government officials, as well as previous SCB executives.
The defendants include her husband, Hong Kong tycoon Eric Chu Nap Kee, sentenced to nine years in prison, and a Central Bank of Vietnam inspector, sentenced to life imprisonment for pocketing the equivalent of €4.8 million in kickbacks.
Vietnam’s biggest-ever fraud case
The verdict concluded a five-week trial. The trail documents, stored in 105 boxes weighing 6 tons, were safeguarded by security cameras and fire safety equipment, according to VN Express. Over 1,000 properties owned by Lan were seized, with nearly 2,700 individuals summoned for the trial, while 10 state prosecutors and around 200 lawyers were involved.
Experts described the case as unprecedented milestone in Vietnam’s anti-corruption crackdown. The case involved the largest number of defendants, the biggest number of evidence and the money involved was also astronomical.
Despite not directly holding executive power at SCB, Lan owned 91.5% of the bank’s shares through third parties and shell companies. Accused of orchestrating fake loan applications to siphon money from the bank over 11 years, Lan’s loans comprised 93% of the bank’s total credit issuance, as per state media.
To conceal the fraud, Lan and other SCB bankers allegedly paid state officials $5.2 million — the largest bribe recorded in Vietnam. The bribe money was reportedly handed over in Styrofoam boxes. Do Thi Nhan, former chief banking inspector at the State Bank of Vietnam, stated during the trial that she refused Styrofoam boxes containing money, but Lan declined to take them back.
Vietnam’s anti-corruption crackdown
Since 2021, Vietnam has seen thousands indicted for corruption, marking a significant anti-corruption effort in the Communist Party’s history.
The so-called Blazing Furnace anti-graft campaign has touched the highest echelons of Vietnamese politics, with two presidents and two prime ministers having resigned in recent years and hundreds of officials disciplined or jailed.