Vietnamese property tycoon sentenced to death over $12bn fraud

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Vietnamese property tycoon Truong My Lan has been sentenced to death by a court in Ho Chi Minh City for embezzling more than $12bn in the country’s largest financial fraud, state media reported.  

Lan, 67, had committed crimes with serious consequences and with no possibility of recovering the lost funds, state media quoted the court verdict as saying on Thursday.

Her actions had also eroded the public’s trust in the leadership of the ruling Communist party and the state, it said.

Lan, chair of property developer Van Thinh Phat Group, was found guilty on charges of bribery, embezzlement and abuse of power following a trial that began last month. 

Lan had denied the charges against her. Her lawyer said Lan will appeal the verdict.

Lan was accused of embezzling 304tn dong ($12bn) from Vietnam’s Saigon Joint Stock Commercial Bank (SCB) by illegally controlling the bank through proxies, using “ghost” companies to take out loans, and giving bribes of millions of dollars to government officials who discovered the fraud.

Other than Lan, a further 85 people have also been charged in the case, including central bank officials.

Authorities say SCB also gave loans worth more than $44bn to Van Thinh Phat and other companies controlled by Lan between 2012 and 2022, accounting for 93 per cent of the total loans disbursed by the bank, which was placed under central bank control after Lan’s arrest.

The corruption charges against Lan are part of a broader graft crackdown by the Communist party that has slowed down government approval for projects and raised questions over political stability in one of the world’s fastest-growing economies. 

Vo Van Thuong resigned as Vietnam’s president in March after only a year in office because of unspecified “violations” and “shortcomings”. Thuong’s predecessor as president, Nguyen Xuan Phuc, resigned in January 2023 amid an overhaul of the government’s top ranks that also saw the departure of two deputy prime ministers.

Hundreds of high-ranking government officials have been arrested in the crackdown.

The expansion of scrutiny to the private sector has added to the uncertainty. Lan’s arrest in 2022 triggered a slowdown in the property market and corporate bond activity. The tycoon comes from one of Vietnam’s wealthiest families and was the most prominent businessperson to face graft allegations since the crackdown began.

Vietnam has been one of the top choices for international manufacturers diversifying operations away from China amid growing tensions between Beijing and Washington. The south-east Asian country has seen record flows of foreign investment, with FDI hitting an all-time high of $36.6bn last year.

However, the corruption crackdown has dented some of its appeal. Government officials are reluctant to approve licences and projects for fear of being caught up in graft investigations, resulting in what analysts have described as “bureaucratic paralysis”.