Real estate tycoon Truong My Lan, aged 67, faced a grave fate as she was sentenced to death by a court in Ho Chi Minh City for her involvement in what is deemed Vietnam’s largest financial fraud case to date, as reported by state media Vietnam Net. Lan, the chair of Van Thinh Phat real estate company, was formally charged with fraud amounting to a staggering $12.5 billion, approximately 3% of Vietnam’s 2022 GDP.
Illegal control over Saigon Joint Stock Commercial Bank from 2012 to 2022 allowed Lan to authorize 2,500 loans resulting in a massive $27 billion loss for the bank, according to state media VnExpress. The court mandated Lan to compensate the bank with $26.9 million. Despite her participation in charity activities and it being her first offense, the severity of the case led to a harsh sentence, with the court deeming Lan as the orchestrator of a sophisticated criminal enterprise with irreparable consequences.
The court’s judgment highlighted how Lan’s actions not only infringed upon property management rights but also destabilized Saigon Joint Stock Commercial Bank, damaging public trust in the leadership of the Party and State. Additionally, Lan’s niece, Truong Hue Van, who served as the chief executive of Van Thinh Phat, received a 17-year prison sentence for aiding her aunt in the fraudulent activities.
Truong My Lan (Credits: APN News)
Lan’s journey to becoming a real estate magnate began in 1992 when she, along with her family, established Van Thinh Phat after Vietnam transitioned to a market-oriented economy. Starting with selling cosmetics in Ho Chi Minh City’s oldest market, Lan gradually expanded her business empire, making Van Thinh Phat one of Vietnam’s wealthiest real estate firms, with a portfolio encompassing luxury residential buildings, offices, hotels, and shopping centers.
The court found that Lan exploited her position to siphon funds from SCB through dubious loans to “ghost companies,” ultimately funneling the money back to herself. Additionally, she allegedly engaged in bribery to evade detection. Lan’s arrest in October 2022 marked a significant development in Vietnam’s anti-corruption campaign, which had been intensifying since 2022 under the Blazing Furnace initiative.
Truong My Lan (Credits: AP News)
The ramifications of Lan’s trial reverberated throughout Vietnam, raising concerns about the integrity of other financial institutions and businesses. This uncertainty dampened Vietnam’s economic prospects, causing unease among foreign investors who viewed Vietnam as a potential alternative to China for their supply chains.
The real estate sector, in particular, bore the brunt of the fallout, with numerous firms withdrawing from the market and developers resorting to discounts and incentives to attract buyers amidst a backdrop of empty properties in urban centers.
Communist Party General Secretary Nguyen Phu Trong reiterated the long-term commitment to the anti-corruption campaign, underscoring the ongoing efforts to combat financial malfeasance and uphold transparency in Vietnam’s economic landscape.
