Major Business Figure Truong My Lan Sentenced to Death for $12.5 Billion Financial Fraud

Vietnam:

Truong My Lan, Chairwoman of Van Thinh Phat Holdings Group, Convicted of Embezzlement and Bribery

April 11, 2023

In a highly publicized trial over a record-breaking financial fraud case worth an estimated US$12.5 billion, property tycoon Truong My Lan was sentenced to death on April 11, 2023. The three-judge panel, handpicked by the Communist Party’s Supreme People’s Court, found Lan guilty of embezzlement, bribery, and violations of banking rules.

Allegations and Trials

Lan, the chairwoman of Van Thinh Phat Holdings Group, stood accused of manipulating Saigon Commercial Bank (SCB), which she effectively controlled through numerous proxies, according to investigators. She had denied the charges, insisting her subordinates were to blame.

During the trial, prosecutors detailed how Lan had arranged unlawful loans to shell companies, siphoning off funds from SCB for over three years. The bank, which was bailed out in October 2022 following a devastating run on its deposits, lost an estimated US$27 billion or 6% of Vietnam’s 2023 Gross Domestic Product.

Extensive Impact and Damages

The scandal resulted in the identification of nearly 42,000 victims, each bound by SCB bonds they could no longer access due to the scheme. The scale of damages left state media reporting on the “extensive impact” of the fraud.

Key Players and Bribes

Two key players in the scandal, Vo Tan Van, the former CEO of SCB, and Do Thi Nhan, the former Chief Inspector of the State Bank of Vietnam, faced trial alongside Lan. Nhan testified that the illicit funds were offered in styrofoam boxes in the largest recorded bribe in Vietnam’s history, amounting to US$5.2 million.

Anti-Corruption Efforts

The financial fraud case is part of an ongoing anti-corruption sweep in Vietnam. Since 2021, over 4,400 individuals have been indicted, spanning over 1,700 graft cases. The most recent high-profile figure to fall was luxury property tycoon Do Anh Dung of Tan Hoang Minh Group, who received an eight-year prison sentence for orchestrating a US$355 million bond scam in 2022.

Economic Consequences

The economic upheaval resulted in a US$40 billion loss to Vietnam’s stock market in 2022 and dampened investor confidence, threatening the economic recovery of the Southeast Asian nation.

Protests and Resistance

Hours before the verdict was announced, police reportedly thwarted protests in Hanoi and Ho Chi Minh City, a rare occurrence in Vietnam’s one-party communist state.

Lan’s Final Remarks

In final remarks to the court last week, Lan expressed a fleeting consideration of taking her life. “I am so angry that I was naive enough to engage in this fierce business environment - the banking sector - which I have little knowledge of,” she said, her voice reportedly trembling.