Vietnamese tycoon Truong My Lan has been Sentenced to Death for Defrauding $44 billion

This trial in Vietnam was truly remarkable, matching the magnitude of one of the largest bank frauds in history.

In a solemn setting, within the colonial-era courthouse in Ho Chi Minh City, a 67-year-old Vietnamese property developer received a severe sentence on Thursday. The individual was found guilty of embezzling from one of the country’s largest banks for a staggering 11-year period.

The figures are absolutely staggering. Truong My Lan has been found guilty of borrowing a staggering $44 billion (£35 billion) from the Saigon Commercial Bank. Prosecutors have stated that a staggering $27 billion may never be recovered.

The usually secretive communist authorities surprisingly provided extensive information about this case, offering minute details to the media. According to reports, a significant number of individuals were called upon to provide testimony, with a team of state prosecutors and numerous lawyers participating in the proceedings.

The evidence was found in 104 boxes, weighing a total of six tonnes. Eighty-five defendants stood trial alongside Truong My Lan, who vehemently denied the accusations.

“I don’t think there has ever been a trial quite like this during the communist era,” remarks David Brown, a retired US state department official who has extensive experience in Vietnam. “There has definitely been nothing of this magnitude.”

The trial was a highly intense episode in the ongoing “Blazing Furnaces” anti-corruption campaign spearheaded by the Communist Party Secretary-General, Nguyen Phu Trong.

Nguyen Phu Trong, a staunch conservative with a deep understanding of Marxist theory, is concerned about the growing public discontent towards rampant corruption, which he sees as a significant challenge to the Communist Party’s hold on power. He embarked on the campaign wholeheartedly in 2016, after outmanoeuvring the then pro-business prime minister to secure his position as the party’s leader.

The campaign has witnessed the downfall of two presidents and two deputy prime ministers, along with the punishment or imprisonment of numerous officials. Now a woman who is among the wealthiest in the country has joined their ranks.

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Truong My Lan hails from a Sino-Vietnamese family in Ho Chi Minh City, formerly known as Saigon. For years, it has been the driving force behind the Vietnamese economy, tracing its roots back to when it served as the capital of South Vietnam and was home to a vibrant ethnic Chinese community.

She began her journey as a market stall vendor, selling cosmetics alongside her mother. However, with the advent of economic reform in 1986, she seized the opportunity to invest in land and property. By the 1990s, she had amassed an impressive collection of hotels and restaurants.

While Vietnam is widely recognised for its booming manufacturing industry and its role as a potential substitute for China in the supply chain, it is important to note that many affluent Vietnamese individuals have accumulated their wealth through property development and speculation.

Ownership of all land is under the control of the state. Access to it is often dependent on personal connections with state officials. Corruption reached new heights as the economy expanded, becoming widespread.

In 2011, Truong My Lan had established herself as a prominent business figure in Ho Chi Minh City. She successfully orchestrated the merger of three financially struggling banks, creating a larger entity known as Saigon Commercial Bank.

In accordance with Vietnamese law, it is not permitted for any individual to possess a stake exceeding 5% in a bank. According to prosecutors, Truong My Lan allegedly controlled over 90% of Saigon Commercial by utilising numerous shell companies and individuals as her representatives.

She was accused of utilising her authority to appoint her preferred individuals as managers, subsequently instructing them to authorise numerous loans to the network of shell companies under her control.

The amounts withdrawn are astonishing. The majority of the bank’s lending was comprised of her loans.

Prosecutors allege that for a span of three years starting in February 2019, she instructed her driver to withdraw a staggering amount of Vietnamese dong, totaling over 108 trillion, which is equivalent to more than $4 billion in cash. This substantial sum was then stored in her basement.

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That amount of money, even if all of it was in Vietnam’s largest denomination banknotes, would weigh a staggering two tonnes.

She was also accused of making generous payments to ensure her loans were never scrutinised. One individual who faced trial was formerly a chief inspector at the central bank. They were accused of allegedly accepting a $5 million bribe.

The extensive coverage surrounding the case fueled public outrage over corruption allegations against Truong My Lan. Her worn-out and natural appearance in court stood in sharp contrast to the glamorous images that had been previously circulated.

However, there are also inquiries regarding how she managed to perpetrate the alleged fraud for such an extended period of time.

“I am perplexed,” remarks Le Hong Hiep, the individual in charge of the Vietnam Studies Programme at the ISEAS – Yusof Ishak Institute in Singapore.

“Because it was widely known.” There were widespread rumours in the market about Truong My Lan and her Van Thinh Phat group using SCB for their personal gain, financing the extensive purchase of real estate in highly sought-after areas.

“It was clear that she needed to find a source of funds.” However, it is a widely accepted practice. Other banks are also utilised in a similar manner. It seems that the government may have overlooked this issue due to the abundance of similar cases in the market.

David Brown suggests that influential individuals who have long held sway over business and politics in Ho Chi Minh City shielded her. He believes there is a larger factor at play in the way this trial is being conducted: an attempt to reaffirm the control of the Communist Party over the entrepreneurial spirit of the southern region.

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“The objective of Nguyen Phu Trong and his supporters within the party is to regain authority over Saigon, or at the very least prevent it from slipping out of their grasp.”

“Until 2016, the party in Hanoi allowed a certain group to have significant influence over the city.” They would say all the expected things that local communist leaders are supposed to say, but behind the scenes, they were profiting from the city’s earnings.

Party chief Nguyen Phu Trong, at 79 years old, is facing health challenges and is expected to step down at the next Communist Party Congress in 2026, where new leaders will be selected.

He is widely recognised as one of the most influential and enduring secretary-generals, successfully revitalising the conservative wing of the party to a degree unmatched since the 1980s. It is evident that he is not willing to take any chances that could potentially weaken the party’s grip on political power.

However, he finds himself caught in a paradox. With his guidance, the party has set an impressive target of achieving the status of a wealthy nation by 2045, focusing on developing a technology and knowledge-driven economy. This is the reason behind the growing alliance with the United States.

However, with the rapid expansion in Vietnam, it is almost certain that corruption will also increase. Excessive focus on combating corruption can potentially stifle economic activity. There have been concerns raised about the sluggishness of bureaucracy, with officials avoiding making decisions that could potentially implicate them in a corruption case.

“That’s the irony,” remarks Le Hong Hiep. “Their business practices have been questionable for quite some time. Corruption has long played a significant role in keeping the machinery running smoothly. If they cease the grease, things may no longer function.”

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