A property tycoon has been sentenced to death by a court in Ho Chi Minh City in southern Vietnam in the country’s largest financial fraud case, state media said.
Truong My Lan, 67, chair of real estate company Van Thinh Phat (VTP), was accused of fraud amounting to 12.5 billion US dollars (£10 billion) — nearly 3% of the country’s 2022 GDP.
Lan illegally controlled Saigon Joint Stock Commercial Bank between 2012 and 2022 to allow 2,500 loans that resulted in losses of 27 billion US dollars (£22 billion) to the bank, state media VnExpress reported. The court has asked her to compensate the bank 26.9 million US dollars (£21.5 million).
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 with no possibility of the money being recovered, VnExpress said.
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 judgment as saying.
The 2011 merger of a beleaguered SCB bank involved two other lenders. The banks have since become one of Vietnam’s largest commercial banks by assets.
Former central bank official Do Thi Nhan was also sentenced to life in prison on Thursday for accepting 5.2 million US dollars (£4.1 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, with former president Vo Van Thuong resigning in March after being implicated in the campaign.
But it is the scale of Lan’s trial that has shocked the nation, with VTP among Vietnam’s richest real estate firms, working on projects including luxury residential buildings, offices, hotels and shopping centres.
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 the country had 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 1,300 property firms withdrew from the market in 2023, developers have been offering discounts and gold as gifts to attract buyers, and despite rent for shop houses (buildings serving as both a residence and a commercial business) falling by a third in Ho Chi Minh City, many in the city centre are still empty, according to state media Thanh Nien.
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”.