Vietnamese property tycoon sentenced to death in country’s largest financial fraud, state media reports

The Vietnamese property tycoon Truong My Lan was sentenced to death on Thursday for her involvement in the country’s biggest financial fraud case, state media outlet Thanh Nien reported.

Lan was found guilty of embezzlement, bribery and violating banking rules around lending. She was sentenced to death for the embezzlement charges and to 20 years in prison for each of the other two accusations, according to state media.

Lan, who is the chairwoman of real estate development firm Van Thinh Phat Holdings Group, was accused of appropriating assets from Saigon Joint Stock Commercial Bank by taking out unlawful loans to Van Thinh Phat and shell companies.

Much of Lan’s defense was based on her lawyers arguing that she only controlled about 15% of the bank and did not have an official position in the bank, suggesting that embezzlement charges were not appropriate, local media reported.

However, witnesses who held large stakes themselves told the court that they were instructed to act on Lan’s behalf. Judges therefore found that Lan holds a controlling stake of more than 90% in SCB through proxies and was the de facto owner of the bank, local media reported.

The loans were reportedly worth a total of $44 billion and accounted for more than 90% of SCB’s lending between 2012 and 2022. An estimated $12.3 billion was allegedly funneled to Van Thinh Phat while other funds were used privately. Some of the over 1,000 loans had been settled by Lan, judges found, but the court said she would have to compensate the bank fully.

Lan was first arrested in 2022, with allegations dating back around 10 years. Alongside Lan, more than 80 other people including central bank officials have been charged in the case for damaging SCB, state media reported.

Reuters reported on Thursday that a family member confirmed that Lan would appeal the sentence.

CNBC was not able to independently verify the report.

The case against Lan is part of a wider crackdown on corruption that has been spearheaded by Vietnam’s ruling Communist party and has been dubbed “blazing furnace.” High-level politicians including former Vietnamese presidents have been forced to resign in connection with the campaign and hundreds of officials and businesspeople have been sentenced.