
Truong My Lan, a Vietnamese real estate tycoon and chair of the real estate company Van Thinh Phat, has been sentenced to death by a court in Ho Chi Minh City. This comes as a result of her involvement in the country’s largest fraud case, which amounted to a staggering $12 billion. The fraud committed by Lan accounted for nearly 3 percent of Vietnam’s GDP in 2022, according to Vietnam’s Thanh Nien as reported by The Associated Press.
$12 billion fraud case in Vietnam
Between 2012 and 2022, Truong My Lan allegedly controlled the Saigon Joint Stock Commercial Bank, using it to divert funds through thousands of ghost companies and by bribing government officials. Her arrest in 2022 was a significant event, considering the high-profile nature of her position and the scale of the fraud she was involved in.
The $12 billion fraud case in Vietnam involves real estate tycoon Truong My Lan and her alleged accomplices. They are accused of being part of a massive scam that siphoned off 304 trillion dong ($12.46 billion) from Saigon Joint Stock Commercial Bank (SCB), the country’s largest bank by assets. Truong My Lan effectively controlled the bank through dozens of proxies. The fraud scheme also resulted in losses of $1.2 billion for holders of bonds issued by Van Thinh Phat, Lan’s real estate firm.
Truong My Lan’s fraudulent activities included falsifying financial documents, embezzling funds, and manipulating the stock market. She orchestrated the merger of SCB with two other lenders in 2011 as part of a plan coordinated with the central bank to salvage troubled banks. However, her actions ultimately led to significant financial losses for investors and businesses, as well as a loss of trust in the Vietnamese financial system.
The trial for the $12 billion fraud case began on March 5, 2024, and concluded with Truong My Lan being sentenced to death on April 11, 2024. The court’s decision reflects the severity of her crimes and the determination of the Vietnamese government to crack down on corruption. The death sentence serves as a stern warning to others involved in fraudulent activities and emphasizes the importance of transparency, accountability, and ethical practices in the business community.
Vietnam’s Anti-Corruption Drive
Lan’s arrest and subsequent sentencing are part of a broader anti-corruption campaign that has been ongoing in Vietnam since 2022. This campaign, known as the ‘Blazing Furnace,’ has not spared even top Vietnamese politicians. In fact, last month, Vo Van Thuong resigned after being implicated in the anti-corruption drive.
Impact on Vietnam’s Real Estate Market
Van Thinh Phat, the real estate company chaired by Truong My Lan, is one of Vietnam’s wealthiest real estate firms. It has undertaken various projects, including luxury residential buildings, offices, shopping centers, and hotels. However, the magnitude of the fraud committed by Lan has raised concerns among analysts, particularly as Vietnam was positioning itself as an alternative investment destination for companies looking to diversify their supply chains away from China. In 2023, around 1,300 property firms withdrew from Vietnam’s real estate market, dealing a significant blow to the sector.
Current State of Vietnam’s Real Estate Market
To attract buyers, developers have resorted to offering discounts and even gold as gifts. Despite a one-third decrease in rent for shophouses in Ho Chi Minh City, numerous properties in the city center remain vacant. This indicates the challenges faced by the real estate market in Vietnam following the fraud case and subsequent market volatility.
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