She committed the largest financial fraud in Vietnam’s history: Truong My Lan is said to have stolen more than eleven billion euros – almost three percent of Vietnam’s GDP. Now she has been sentenced to death.
Entrepreneur Truong My Lan has been sentenced to death in her home country of Vietnam for financial fraud. As the state-controlled newspaper Thanh Nien reported, a court in Ho Chi Minh City handed down the verdict against the 67-year-old.
The chairwoman of real estate developer Van Thinh Phat Holdings Group was found guilty of embezzlement, bribery and violating banking regulations. She is said to have obtained around 11.6 billion euros through fraud. This corresponds to almost three percent of Vietnam’s gross domestic product (GDP). It is the largest case of financial fraud in the country’s history.
Government representative bribed
Between 2012 and 2022, Lan is said to have diverted money from the Saigon Joint Stock Commercial Bank (SCB), which she illegally controlled, through thousands of “ghost companies” and also bribed government officials.
From the beginning of 2018 to October 2022, when the state rescued SCB after a run on its deposits, it appropriated large sums of money by arranging illegal loans to shell companies, investigators said. Around 42,000 of the bank’s customers are said to have fallen victim to the fraud.
Fusion of two Credit institutions threaded
Lan has been a central figure in Vietnamese finance for years and orchestrated the merger of SCB with two other lenders in 2011 to rescue the troubled banks as part of a plan coordinated with the central bank.
The government said in March that three independent auditing firms had committed violations in the SCB case, without naming the companies.
Public documents show that leading international auditors, including Ernst & Young and KPMG, did not raise concerns about the bank in their audits. They did not respond to Reuters requests for comment.
The extent of the fraud shocked the country
When Lan was arrested in Vietnam in October 2022 as part of an anti-corruption campaign, it caused a stir across the country. Above all, the extent of the fraud shocked many. Lan’s company built luxury apartments, office buildings, hotels and shopping centers in Vietnam.
Other defendants include Lan’s husband, a Chinese national, and 15 central bank officials, including a senior inspector. He is accused of accepting $5.2 million in bribes from Lan.
Experts assume that other banks and companies could also be involved in similar schemes. This deters some foreign investors from investing in Vietnam, which wants to position itself as an alternative to China as a location for supplier companies.
“Blazing Furnace” campaign against corruption
The trial against the real estate tycoon, which began on March 5 and ended earlier than planned, was part of a campaign against bribery. The leader of the ruling Communist Party, Nguyen Phu Trong, has been promising to fight corruption for years, although with little tangible results.
As part of this campaign, dubbed the “Flaming Furnace,” hundreds of high-ranking state officials and businessmen have been prosecuted or forced to resign.