A top Vietnamese property tycoon has been sentenced to death in one of the biggest corruption cases in history.
Truong My Lan, 67, will face death by lethal injection after a panel of three jurors and two judges rejected all defence arguments and found her guilty of swindling cash from Saigon Commercial Bank (SCB) over a decade.
The chair of major developer Van Thinh Phat was accused of fraud amounting to $12.5 billion (£10 billion) – nearly 3 per cent of the country’s 2022 GDP. But total damages have been estimated at $27 billion.
She illegally controlled the SCB between 2012 to 2022 to siphon of these funds through thousands of ghost companies and by paying bribes to government officials.
‘The defendant’s actions… eroded people’s trust in the leadership of the (Communist) Party and state,’ read the verdict at the trial in southern business hub Ho Chi Minh City. Lan denied the charges and blamed her subordinates.
After a five-week trial in business hub Ho Chi Minh City, 85 others also face verdicts and sentencing on charges ranging from bribery and abuse of power to appropriation and violations of banking law.
Truong My Lan (C), chairwoman of Van Thinh Phat Holdings, sits during her trial at the Ho Chi Minh City People’s Court
The businesswoman is accused of swindling cash from Saigon Commercial Bank (SCB) over a decade
After a five-week trial in business hub Ho Chi Minh City, Lan and 85 others face verdicts and sentencing on Thursday
Lan was sentenced for embezzling $12.5 billion. Prosecutors said Thursday the total damages caused by the scam now amounted to $27 billion
Prosecutors have called for Lan to face the death sentence, an unusually severe punishment in such a case
Lan embezzled $12.5 billion, but prosecutors said Thursday the total damages caused by the scam now amounted to $27 billion – a figure equivalent to six percent of the country’s 2023 GDP.
As part of the far-reaching fraud case, Lan was found guilty of taking out of taking out $44bn in loans from SCB was also ordered to pay back $27bn – which is likely to never be fully recovered.
There have been suggestions that the death penalty sentence is a ploy to get her to hand back some of the missing money, the BBC reports.
Capital punishment is not rare in Vietnam, which was recently named the biggest executioner in Southeast Asia by Amnesty International, and applies the death sentence for 22 offences, including murder, drug trafficking and rape.
The death sentence is an unusually severe punishment in a financial crime case, with the last widely publicised death penalty for corruption charges in 2013.
Early this morning, more than a dozen police cars and vans carrying the defendants – a list that includes former central bankers, ex-government officials and previous SCB executives – arrived at the colonial-era courthouse.
Most of the accused sat in the courtroom with their heads bowed, although Lan could be seen fidgeting and looking up from the front row.
Lan’s husband, Hong Kong property magnate Eric Chu, was given a nine-year prison sentence for aiding his wife. Her niece Truong Hue Van received 17 years.
A mother of two daughters, Lan started out as a market stall vendor selling cosmetics, but began to build her real estate portfolio from 1986 as the ruling Communist Party brought in economic reforms.
Her arrest in October 2022 was among the most high-profile in an ongoing anti-corruption drive in Vietnam that has intensified since 2022.
Properties owned by Van Thinh Phat include the Saigon One building, which is under construction, left, and other buildings in District 1 of Ho Chi Minh
Properties owned by Van Thinh Phat include the Union Square shopping mall complex in Ho Chi Minh City
Properties owned by Van Thinh Phat include the 15-floor VTP Office Service Center and the Sherwood Residence, where Lan is previously reported to have lived
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.
At one point in 2022, Vietnamese stocks suffered a $40 billion wipeout following a series of big corporate arrests, rattling investor confidence at a delicate moment for the fast-growing economy.
The scale of Lan’s fraud has shocked the nation. VTP was among Vietnam’s richest real estate firms, with projects including luxury residential buildings, offices, hotels and shopping centers.
Lan’s niece (pictured centre) Truong Hue Van, was sentenced to 17 years in prison
From early 2018 through October 2022, when the state bailed out SCB after a run on its deposits, Lan appropriated large sums by arranging unlawful loans to shell companies, investigators said.
Lam will appeal the verdict, a family member told reporters before it was issued.
She and the others were arrested as part of a national corruption crackdown that has swept up numerous officials and members of Vietnam’s business elite in recent years.
Lan appeared to say in final remarks to the court last week that she had thoughts of suicide.
‘In my desperation, I thought of death,’ she said, according to state media.
‘I am so angry that I was stupid enough to get involved in this very fierce business environment – the banking sector – which I have little knowledge of.’
Do Thi Nhan, the former head of the State Bank of Vietnam’s inspection team, told the court she had been offered a bribe
Lan denied the charges and blamed her subordinates. Pictured: Some of the defendants at the trial
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.
Hundreds of people began to stage protests in the capital Hanoi and Ho Chi Minh City, a relatively rare occurrence in the one-party communist state, after Lan’s arrest in October 2022.
Police have identified around 42,000 victims of the scandal, which has shocked the Southeast Asian country.
Lan, who is married to a wealthy Hong Kong businessman also on trial, is accused of setting up fake loan applications to withdraw money from SCB, in which she owned a 90 percent stake.
The real estate tycoon may face the death penalty if convicted of allegations that she siphoned off an amount of $12.5 billion
Police say the scam’s victims are all SCB bondholders who cannot withdraw their money and have not received interest or principal payments since Lan’s arrest.
Prosecutors said during the trial they had seized more than 1,000 properties belonging to Lan.
Authorities have also said $5.2 million allegedly given by Lan and some SCB bankers to state officials to conceal the bank’s violations and poor financial situation was the largest-ever bribe recorded in Vietnam.
The woman who was offered the bribe – Do Thi Nhan, the former head of the State Bank of Vietnam’s inspection team – said during the trial the cash was handed to her in Styrofoam boxes by the former CEO of SCB, Vo Tan Van.
A top Vietnamese luxury property tycoon – Do Anh Dung, head of the Tan Hoang Minh group – was sentenced to eight years in prison last month
After realising they contained money, Nhan refused the boxes but Van declined to take them back, state media reported.
More than 4,400 people have been indicted during Vietnam’s corruption crackdown, across more than 1,700 graft cases, since 2021.
A top Vietnamese luxury property tycoon – Do Anh Dung, head of the Tan Hoang Minh group – was sentenced to eight years in prison last month after he was found guilty of cheating thousands of investors in a $355 million bond scam.
The real estate sector in Vietnam has been hit particularly hard by the crackdown.
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 shophouses falling by a third in Ho Chi Minh City, many in the city center 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.’