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A court in Ho Chi Minh City sentenced 67-year-old Vietnamese businesswoman Truong My Lan to death for looting one of the country’s largest banks over 11 years.
The head of the large company Van Thinh Phat, Truong My Lan, is one of the few women sentenced to death in Vietnam for financial crimes.
The scale of fraud is also unprecedented. Truong My Lan was found guilty of receiving VND304 trillion (about $12.5 billion) in loans from Saigon Commercial Bank.
However, the total damage from her actions is estimated at $27 billion, and the court verdict obliges her to return exactly that amount, although the prosecution believes that this is hardly possible.
It is believed that the court sentenced Truong to death precisely in order to put pressure on her and force her to return at least part of the stolen property.
Truong My Lan did not admit guilt and placed the blame on her subordinates. One relative told Reuters she plans to appeal the verdict.
Vietnamese media described the process in detail. According to them, 2,700 people were called to testify, 10 state prosecutors and about 200 lawyers participated in the case.
The prosecution materials fit into 104 boxes with a total weight of 6 tons. Along with Truong My Lan, 85 other people were put on trial and are awaiting sentences.
Cash in boxes
According to the prosecution, Truong Mi Lan, the wife of a wealthy Hong Kong businessman also under investigation, used fraudulent loan applications to siphon money out of SCB, in which she actually owned 90% of the shares.
Police say the scam targeted all SCB bondholders, who have been unable to withdraw their money and have received no interest or principal payments since Truong’s arrest. About 42 thousand people suffered from the scam.
During the trial, prosecutors said they seized more than a thousand properties that belonged to her.
Authorities also said the $5.2 million bribe Lan and SCB employees paid to Vietnamese officials to cover up irregularities and the bank’s poor financial condition was the largest in Vietnam’s history.
Do Thi Nhanh, a former head of an inspection team at the State Bank of Vietnam who was offered a bribe, said during the trial that the cash in the boxes was given to her by former SCB CEO Vo Than Van. Realizing that they contained money, Do refused the boxes, but Vo also refused to accept them back.
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The trial, which began on March 5 and ended ahead of schedule, was part of an anti-graft drive that Vietnamese Communist Party General Secretary Nguyen Phu Trong has vowed for years to stamp out, although there have been few tangible results.
In 2022, as a result of a series of arrests, the shares of large companies in Vietnam fell by $40 billion, undermining investor confidence at a difficult time for the fast-growing economy.
Who is Truong My Lan
Truong My Lan comes from a Chinese-Vietnamese family living in Ho Chi Minh City. Home to a large ethnic Chinese community, the city has long been a powerhouse of the Vietnamese economy since its days as Saigon and the capital of South Vietnam.
Truong started out as a market trader, selling cosmetics with her mother, but after the Communist Party launched economic reforms in 1986, she began buying land and real estate. By the 1990s, she owned several hotels and restaurants.
Although Vietnam is mainly known for its fast-growing manufacturing sector, most wealthy Vietnamese have made their money through construction and real estate speculation.
All land in the country officially belongs to the state. Gaining access to it often depends on personal relationships with officials. As the economy grew, so did corruption.
By 2011, Truong My Lan had become a well-known figure in Ho Chi Minh City and was allowed to organize the merger of three small cash-strapped banks into a larger entity, Saigon Commercial Bank.
image copyrightGetty Images
photo captionThe trial took place in Ho Chi Minh City, where Saigon Commercial Bank is located
Vietnamese law prohibits any individual from owning more than 5% of the shares of any bank. But prosecutors allege that through hundreds of shell companies and proxies, Truong My Lan effectively controlled more than 90% of SCB’s shares.
Truong was accused of abusing her power by appointing her own people as managers and approving hundreds of loans for a network of shell companies she controlled. In total, according to the prosecution, Lan’s loans accounted for 93% of all bank loans.
Over a three-year period starting in February 2019, she ordered her driver to take 108 trillion dong (more than $4 billion) in cash from the bank and store it in the basement, according to prosecutors. Even in the largest bills, the money had to weigh about two tons.
Fight against corruption
“There has never been a show trial like this, I think, in the entire communist era,” says David Brown, a retired U.S. State Department official with extensive experience in Vietnam.
Nguyen Phu Trong believes popular anger over rampant corruption poses an existential threat to the Communist Party’s monopoly on power. He began his anti-corruption campaign in earnest in 2016.
Dubbed the “burning furnace” campaign, two presidents and two deputy prime ministers were forced to resign and hundreds of officials were disciplined or jailed. Now one of the richest women in Vietnam has joined this list.
“I’m perplexed,” says Le Hong Hiep, director of the Vietnam Studies program at the Yusof Ishak Institute in Singapore. – It wasn’t a secret. It was well known in the market that Truong My Lan and her Van Thinh Phat group were using SCB as their own piggy bank for the massive acquisition of real estate in the most prestigious locations.”
David Brown believes it was covered up by powerful figures who dominated the country’s business and politics for decades. He sees the way the trial was conducted as an attempt to return the party to control of the south of the country, with its relatively free business culture.
“Nguyen Phu Trong and his party allies are trying to regain control of Saigon, or at least not let it slip completely out of their hands,” he says. “Until 2016, the party in Hanoi allowed this Chinese-Vietnamese mafia to rule the city. They said all the right words that local communist leaders are supposed to say, but at the same time they milked the city for a large share of the money that was made there.”
image copyrightGetty Images
photo captionCommunist Party General Secretary Nguyen Phu Trong leads anti-corruption campaign
Nguyen Phu Trong is one of the most influential general secretaries of the Communist Party in recent years. He restored the authority of the party’s conservative wing to a level not seen since the reforms of the 1980s.
Under his leadership, the party set an ambitious goal of achieving the status of a rich country with an economy based on technology and knowledge by 2045. But he is 79 years old, in poor health, and will likely have to resign at the next party congress in 2026.
Rapid economic growth in Vietnam inevitably means increased corruption. Fighting corruption too aggressively will jeopardize many economic activities.
“This is the paradox,” says Le Hong Hiep. — The Vietnamese growth model has been dependent on corruption for a very long time. Corruption was the lubricant that kept the machine running. If you remove the lubricant, it may stop working.”
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2024-04-11 13:50:56
