Businesswoman Truong My Lan's arrest and the scale of the scam shocked Vietnam. Photo / AP
Businesswoman Truong My Lan's arrest and the scale of the scam shocked Vietnam. Photo / AP
A Vietnamese real estate tycoon was sentenced to death in the country’s biggest financial fraud case, a shocking development in an intensifying anti-corruption drive in the Southeast Asian nation.
Truong My Lan, a high-profile businesswoman who chaired a sprawling company that developed luxury apartments, hotels, offices and shopping malls, was arrested in 2022. The 67-year-old was formally charged with fraud amounting to US$12.5 billion ($20.8b) — nearly 3 per cent of the country’s 2022 GDP.
Death sentences are not uncommon in Vietnam, but it is rare in financial crime cases and for someone this well known.
Lan was born in 1956 and started out helping sell cosmetics with her mother, a Chinese businesswoman, in Ho Chi Minh city’s oldest market, according to state media outlet Tien Phong.
She and her family established the Van Thinh Phat company in 1992, when Vietnam shed its state-run economy in favour of a more market-oriented one that was open to foreigners. Over the years VTP grew to become one of Vietnam’s richest real estate firms.
Today the company is linked to some of Ho Chi Minh’s most valuable downtown properties including the glittering 39-storey Times Square Saigon, the five-star Windsor Plaza Hotel, the 37-storey Capital Place office building and the five-star Sherwood Residence hotel where Lan lived until her arrest.
Lan met her husband, Hong Kong investor Eric Chu Nap-kee, in 1992. They have two daughters.
Truong My Lan faces the death penalty after being convicted of fraud amounting to US$12.5 billion ($20.8b). Photo / AP
What is she accused of?
Lan was involved in the 2011 merger of the beleaguered Saigon Joint Commercial Bank, or SCB, with two other lenders in a plan co-ordinated by Vietnam’s central bank.
She is accused of using the bank as her cash cow, illegally controlling it between 2012 to 2022, and 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 US$27b, state media VN Express reported Thursday.
She was accused of paying bribes to government officials — including a former central official who has been sentenced to life in prison for taking US$5.2 million ($8.6m) in bribes — and violating banking regulations, government documents said.
The court sentenced her to death, saying her actions “not only violate the property management rights of individuals, but pushed SCB into a state of special control, eroding people’s trust in the leadership of the [Communist] Party and state”.
Why is it happening now?
Lan’s arrest in October 2022 is among the most high profile in an ongoing anti-corruption drive in Vietnam that has ramped up since 2022.
Weeks after her trial started in early March, former President Vo Van Thuong resigned after being implicated in the so-called “Blazing Furnace” campaign that has been the hallmark of Communist Party General Secretary Nguyen Phu Trong, the country’s most powerful politician.
Businesswoman Truong My Lan's arrest and the scale of the scam shocked Vietnam. Photo / AP
While Lan’s arrest and the scale of the scam shocked the nation, the case also raised questions about whether other banks or businesses had similarly erred, dampening Vietnam’s economic outlook and making foreign investors jittery.
This is happening as Vietnam tries to argue its case for being the ideal home for businesses trying to move away from neighbouring China.
