By Aniruddha Ghosal
Hanoi: Real estate tycoon Truong My Lan has been sentenced to death by a court in Ho Chi Minh City in southern Vietnam in the country’s largest financial fraud case ever, state media Vietnam Net said.
The 67-year-old chair of the real estate company Van Thinh Phat was formally charged with fraud amounting to $US12.5 billion ($19.1 billion) – nearly 3 per cent of the country’s 2022 GDP.
Truong My Lan, center, in court in Ho Chi Minh City.Credit: AP
Her trial, begun on March 5 and ending earlier than planned, was one dramatic result of a campaign against corruption the leader of the ruling Communist Party, Nguyen Phu Trong, has pledged for years to stamp out.
“We will keep fighting to see what we can do,” a Lan family member told Reuters, speaking on condition of anonymity. Before the verdict, he had said Lan would appeal against the sentence.
Lan had pleaded not guilty to the embezzlement and bribery charges, Nguyen Huy Thiep, one her lawyers said.
“Of course she will appeal the verdict,” he added noting she 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.
Despite mitigating circumstances – this was a first-time offence and Lan participated in charity activities – the court attributed its harsh sentence to the seriousness of the case, saying Lan was at the helm of an orchestrated and sophisticated criminal enterprise that had serious consequences and no possibility of the money being recovered, newspaper VnExpress said.
Vietnam imposes the death penalty mostly for violent offences but also for economic crimes. Human rights groups say it has executed hundreds of convicts in recent years, mainly by lethal injection.
The Thanh Nien newspaper said 84 defendants in the case received sentences ranging from probation for three years to life imprisonment. Among them are Lan’s husband, Eric Chu, a businessman from Hong Kong, who was sentenced to nine years in jail.
Her actions “not only violate the property management rights of individuals and organisations but also push SCB [Saigon Joint Stock Commercial Bank] into a state of special control; eroding people’s trust in the leadership of the Party and State,” VnExpress quoted the judgement as saying.
Her niece, Truong Hue Van, the chief executive of Van Thinh Phat, was sentenced to 17 years in prison for aiding her aunt.
Real estate tycoon Truong My Lan was sentenced to death by a Vietnamese court.Credit: AP
Lan and her family established the company in 1992 after the country shed its state-run economy in favour of a more market-oriented approach that was open to foreigners. She had started out helping her mother, a Chinese businesswoman, to sell cosmetics in Ho Chi Minh City’s oldest market, according to state media Tien Phong.
It would grow to become one of Vietnam’s richest real estate firms, with projects including luxury residential buildings, offices, hotels and shopping centres. This made her a key player in the country’s financial industry. She orchestrated the 2011 merger of the beleaguered SCB bank with two other lenders in coordination with Vietnam’s central bank.
The court found that she used this approach to tap SCB for cash. She indirectly owned more than 90 per cent of the bank – a charge she denied – and approved thousands of loans to “ghost companies”, according to government documents. These loans then found their way back to her, state media VNExpress reported, citing the court’s findings.
She then bribed officials to cover her tracks, it added.
Former central bank official Do Thi Nhan was also sentenced to life in prison for accepting $US5.2 million in bribes.
Lan’s arrest in October 2022 was among the most high-profile in an ongoing anti-corruption drive in Vietnam that has intensified since 2022. The so-called Blazing Furnace campaign has touched the highest echelons of Vietnamese politics. Former president Vo Van Thuong resigned in March after being implicated in the campaign.
But Lan’s trial shocked the nation. Analysts said the scale of the scam raised questions about whether other banks or businesses had similarly erred, dampening Vietnam’s economic outlook and making foreign investors jittery at a time when Vietnam has been trying to position itself as the ideal home for businesses trying to pivot their supply chains away from China.
The real estate sector in Vietnam has been hit particularly hard. An estimated 1300 property firms withdrew from the market in 2023, developers have been offering discounts and gold as gifts to attract buyers, and despite rents for mixed-use properties known in South East Asia as shophouses falling by a third in Ho Chi Minh City, many in the city centre are still empty, according to state media.
In November, Communist Party General Secretary Nguyen Phu Trong, Vietnam’s top politician, said that the anti-corruption fight would “continue for the long term”.
AP, Reuters
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