The head of a real estate giant was sentenced to the death penalty in a fraud case whose damages were estimated at 25 billion euros (more than $36 billion CAD) in total, the biggest scandal financial crisis that Vietnam has experienced.
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The actions of Truong My Lan, boss of the Van Thinh Phat conglomerate, accused of defrauding funds from Saigon Commercial Bank (SCB) for a decade, “eroded people’s confidence in the leadership of the (Communist) Party and the State,” said the jury, according to state media, during the trial held in a court in Ho Chi Minh City (south).
Ms. Truong was found guilty of corruption, embezzlement and violation of banking law. The businesswoman denied her role and placed the blame on her subordinates.
During a massive trial that lasted about a month, Ms. Truong and 85 other defendants appeared to answer the questions and anger of thousands of aggrieved savers who lost their funds almost overnight.
The list of accused included former officials of the central bank, ex-members of the government as well as managers of the bank involved in the fraudulent scheme, the Saigon Commercial Bank (SCB), against the backdrop of an anti-corruption purge orchestrated for several years by communist power targeting the highest political and economic spheres.
The death penalty had only been requested by the prosecutor against Ms. Truong, considered the mastermind of the operation.
“Little knowledge”
At the time of her last public speaking, during the hearings, she confessed to having thought about suicide. “In my despair, I thought about death,” she said, in comments reported by Tuoi Tre, a state newspaper.
“I’m so angry that I was stupid enough to get involved in such a difficult industry (banking) that I had little knowledge about,” she said.
Truong My Lan is convicted of defrauding around 42,000 people between 2012 and 2022, via a bond arrangement transiting through SCB, more than 90% owned by her group, with the complicity of officials responsible for supervising the banking sector.
She was arrested in October, accused of having embezzled 304,000 billion dong, or 11.5 billion euros, which allegedly fueled her luxurious lifestyle and was used for corruption.
But the prosecution affirmed Thursday that the total damage caused by the scam now amounted to 27 billion dollars (25 million euros), or the equivalent of 6% of the country’s GDP in 2023.
The trial revealed certain schemes, such as a bribe of around five million euros in cash hidden in boxes of Styrofoam, a thermal insulator usually used for transporting fruit or seafood.
The recipient, a former manager responsible for inspection within the central bank, assured that she had refused the package, handed out by the former president of the SCB. The latter for his part claimed not to have taken it back after having given it, according to state media.
Prosecutors also reported more than a thousand properties confiscated from Ms. Truong.
Police device
The scale of the scandal pushed hundreds of people to demonstrate in the capital Hanoi and Ho Chi Minh City, in an unusual expression of collective anger tolerated in the communist country.
On Wednesday, a large police force was deployed in front of the headquarters of the central bank in Hanoi, the location of previous rallies.
Due to a lack of transparency and effective regulation, the Vietnamese banking system leaves the door open to powerful private actors who can impose their interests to the detriment of savers.
In recent years, the communist regime has accelerated its anti-corruption campaign. In the name of this policy, more than 4,400 people, including former business stars and deposed ministers, have been prosecuted in more than 1,700 cases since 2021.
The use of the death penalty is commonplace in Vietnam for drug cases, but remains rare for economic offenses or crimes.
Statistics on its application are classified as a state secret, but Amnesty International estimates that “numerous” executions take place each year, in the order of several dozen per year.