Prosecutors are seeking the death penalty for a developer accused of carrying out Vietnam’s biggest ever financial scam — worth nearly 5% of the country’s GDP, according to state media.
Truong My Lan, the chairwoman of real estate developer Van Thinh Phat Holdings Group, is accused of siphoning funds from one of Vietnam’s biggest banks and bribing officials to carry out the fraud.
Prosecutors allege her actions caused damages worth $20 billion — about 4.9% of Vietnam’s gross domestic product.
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“Lan didn’t plead guilty and didn’t show remorse,” state-owned newspaper Thanh Nien cited the prosecutors as saying, while demanding the death penalty on the charge of embezzlement.
“The consequences are extremely serious and irreparable, and therefore, there must be a strict punishment for Truong My Lan and remove her from the society,” it added.
Lan’s trial is expected to run until the end of April, in the economic hub of Ho Chi Minh City.
The trial is unprecedented for its scale, with thousands expected to be summoned and about 200 lawyers participating in the proceedings, according to state media.
If proved, Lan’s case could be one of the largest financial frauds in Asia. Malaysia’s 1MDB corruption scandal involved, for instance, only about $4.5 billion.
Big auditors also in the net
From early 2018 through October 2022, when the state bailed out Saigon Joint Stock Commercial Bank (SCB), after a run on its deposits, Lan appropriated large sums by arranging unlawful loans to shell companies, investigators say.
Lan and her accomplices are accused of siphoning off more than 304 trillion dong ($12.46 billion) from SCB, which she effectively controlled through dozens of proxies, investigators say.
Prosecutors have also accused the group of causing damages to the to the tune of a further 193 trillion dong, more than 129 trillion dong of which consists of accumulated interest on the loans they took.
Lan is also accused of bribing officials to ignore her activities, including paying an alleged $5.2 million to a senior central bank inspector, the investigators said.
Three independent auditing firms had committed violations in the SCB case, the Vietnamese government said, adding that “intentional collusion and violations” by auditors had not been ruled out.
Top global firms, such as Ernst & Young and KPMG, did not flag concerns about the bank in their audits, public documents show.
Vietnam’s anti-corruption crusade
Lan’s trial is part of a campaign against graft that the leader of the ruling Communist Party (CPV), Nguyen Phu Trong, has pledged for years to stamp out.
The “blazing furnace” anti-bribery campaign is aimed at stamping out widespread corruption but is also suspected by critics to be a tool for political infighting.
On Wednesday, Vietnamese President Vo Van Thuong resigned — a move that the CPV said was brought on because he ‘violated party rules.’
Thuong had also been a senior party official of economic hub Ho Chi Minh City, where Lam’s trial is underway.
Meanwhile, foreign investors and diplomats have repeatedly blamed the anti-corruption campaign for slowing down decisions in a country that already grapples with cumbersome bureaucracy. The ongoing political turmoil is unlikely to shore up investor confidence.
The crackdown also comes at a crucial time for Vietnam.
Western nations — especially the United States — are looking to jumpstart supply chains for critical minerals and critical technologies, like chips, in the country.
Last year, US president Joe Biden signed off on deals worth billions with Vietnamese firms, including in the rare earths sector. A month later, Vietnamese authorities swooped in on top executives from the industry for mining violations and illegal sales.
- Reuters, with additional editing by Vishakha Saxena
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