Vietnamese property tycoon sentenced to death in $27bn fraud case

Truong My Lan, 67, found guilty of embezzlement, bribery and violations of banking rules

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.

Truong My Lan, 67, chair of real estate company Van Thinh Phat (VTP), was accused of fraud amounting to $12.5bn (£10bn).

Prosecutors alleged Lan illegally controlled the Saigon Joint Stock Commercial Bank (SCB) between 2012 and 2022 to siphon off these funds through thousands of ghost companies and by paying bribes to government officials.

Truong My Lan, centre, chair of Van Thinh Phat Holdings, sits during her trial at in Ho Chi Minh City ((EPA))

Prosecutors said that more than 2,500 loans were allowed from the bank, resulting in losses of $27bn. It is a figure equivalent to 6 per cent of the country’s GDP in 2023. Police identified around 42,000 victims of the scandal.

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 alleged. Former central bank official Do Thi Nhan was also sentenced to life in prison on Thursday for accepting $5.2m in bribes.

Under Vietnamese law, individuals are prohibited from holding more than five per cent of the shares in any bank. Through Lan’s shell companies, as well as people acting as her proxies, it is believed she actually owned more than 90 per cent of SCB. Her loans made up 93 per cent of all the bank’s lending.

“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,” Lan is reported to have said during final remarks to the court last week, according to state media. Prosecutors were also quoted as saying she pleaded not guilty.

Lan’s arrest in October 2022 was among the most high-profile in an ongoing anti-corruption drive in Vietnam that has intensified in the last two years.

The so-called Blazing Furnace campaign, led by the Communist Party general secretary, Nguyen Phu Trong, has touched the highest echelons of Vietnamese politics, with former president Vo Van Thuong resigning in March after being implicated in the campaign. Another president and two deputy prime ministers have also been forced to resign, while hundreds of officials have been disciplined or jailed.

Communist Party general secretary Nguyen Phu Trong has led the campaign against corruption (AP)

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.

The prosecution alleged that more than $4bn of the loans were withdrawn by her driver, over a period of three years from February 2019, and stored in her basement. That amount of cash, even if it was all in Vietnam’s largest denomination banknotes, would weigh at least two tonnes.

The habitually secretive communist authorities, led by Mr Trong, were uncharacteristically open with this case as they continued their crackdown on corruption.

They said 2,700 people were summoned to testify, while 10 state prosecutors and around 200 lawyers were involved. The evidence, meanwhile, contained in 104 boxes, weighed a staggering six tonnes. Eighty-five defendants were tried alongside Lan.