Vietnam’s “Blazing Furnace” Anti-Corruption Campaign: Real Estate Tycoon Receives Death Sentence in $12.5 Billion Financial Fraud Case
In a bold move to intensify its anti-corruption campaign, the Vietnamese authorities have handed down a death sentence to Truong My Lan, the former chairwoman of property developer Van Thinh Phat Holdings Group, in a high-profile financial fraud case worth $12.5 billion.
Lan’s Sentencing: A Show of Anti-Corruption Intent
Thursday, April 21, 2023, marked a significant day in Vietnam’s ongoing anti-corruption campaign as Lan, in her late 60s, received her sentence following a public trial. This ruling came after a series of high-profile resignations from top Vietnamese leaders over the past year, which included former President Vo Van Thuong.
The Scale of the Financial Fraud
Lan and her accomplices were found to have siphoned off more than 304 trillion dong ($12.5 billion) from Saigon Joint Stock Commercial Bank (SCB), causing damages of 677 trillion Vietnamese dong ($27 billion) to the bank. These actions led to the largest financial fraud case in Vietnam’s history.
Fraud’s Impact: Shocking the Public and Investors
The extent of the fraud—equivalent to roughly 3% of Vietnam’s economy—has raised eyebrows both locally and internationally, surpassing the magnitude of the 1MDB state fund scandal in Malaysia, where about $4.5 billion was looted.
Significance of the Trial
The public trial marked a change in Vietnam’s tight-controlled information landscape. Among those sentenced in the case were Lan’s husband, Eric Chu, a Hong Kong businessman, and her niece, who received 17 years in prison.
The Vietnamese Communist Party’s Anti-Corruption Drive
Over the past year, Vietnam’s ruling Communist Party (CPV) has unveiled staggering levels of embezzlement and fraud as part of its anti-corruption campaign, which began in 2016. This campaign has investigated hundreds of party members and resulted in the resignation of high-level officials, including former President Vo Van Thuong.
Personal and Political Concerns
The CPV’s push for anti-corruption efforts is seen as a power grab, control measure, and a succession bid by Secretary General Trong, who is worried about the future of the Communist Party and its young leaders’ potential interests.
Economic Implications
Vietnam has seen good economic performance, but the recent news of corruption and mismanagement has shaken investor confidence, leading to decreased government spending and public official anxiety about potential investigations.
Future of Anti-Corruption Efforts
The purged leaders were seen as competent and trusted business-friendly figures, and their removal has led to a hesitancy among public officials to take on new responsibilities. While some believe that the next leaders could continue a stronger fight against corruption, political instability is expected to continue until the next congress in 2026.
Perception of the Campaign
People now feel that “no one is safe” as the anti-corruption campaign has gone beyond the party echelons and involves the corporate world, spreading a sense of fear and urgency.