HANOI, Vietnam (AP) — Real estate tycoon Truong My Lan was sentenced to death Thursday by a court in Ho Chi Minh City, southern Vietnam, in the largest financial fraud case ever known in the country, state media Thanh Nien said.
Real estate company chairman Van Thinh Phat, 67, has been formally charged with fraud amounting to $12.5 billion, or nearly 3% of the country’s GDP in 2022.
Lan illegally controlled Saigon Joint Stock Commercial Bank between 2012 and 2022 to grant 2,500 loans that resulted in $27 billion in losses for the bank, state media VnExpress reported. The court asked him to compensate the bank $26.9 million.
Despite mitigating circumstances – it was a first offense and Lan was involved in charitable activities – the court attributed his heavy sentence to the seriousness of the case, saying Lan was the head of an orchestrated criminal enterprise and sophisticated which had serious consequences with no possibility of the money being recovered, VnExpress said. His actions “not only violate the property management rights of individuals and organizations, but also push SCB (Saigon Joint Stock Commercial Bank) into a state of special control; eroding the people’s confidence in the leadership of the Party and the state,” VnExpress said citing the judgment.
The 2011 merger of a struggling SCB bank involved two other lenders. The banks have since become one of Vietnam’s largest commercial banks in terms of assets.
Do Thi Nhan, a former central bank official, was also sentenced to life in prison on Thursday for accepting $5.2 million in bribes.
Lan’s arrest in October 2022 was one of the most high-profile in Vietnam’s ongoing anti-corruption campaign that has intensified since 2022. The so-called Burning Furnace campaign has reached the highest echelons of Vietnamese politics. Former President Vo Van Thuong resigned in March after becoming involved in the campaign.
But it was the scale of Lan’s trial that shocked the nation. VTP was among Vietnam’s richest real estate companies, with projects including luxury residential buildings, offices, hotels and shopping malls. Analysts said the scale of the scam raised questions about whether other banks or companies had made a similar mistake, dampening Vietnam’s economic outlook and making foreign investors nervous at a time when Vietnam is trying to position itself as the ideal country for companies trying to reorient their offering. channels away from China.
Vietnam’s real estate sector has been particularly hard hit: around 1,300 real estate companies withdrew from the market in 2023, developers offered discounts and gift gold to lure buyers, and despite a third of declines in property prices rents of shops in Ho Chi Minh. City, many city centers are still empty, according to state media.
In November, Communist Party General Secretary Nguyen Phu Trong, Vietnam’s top politician, said the anti-corruption fight would “continue for the long term.”
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