Home World News Vietnam’s real estate mogul ensnared in country’s largest $12.5 billion corruption scandal dubbed ‘Blazing Furnace

Vietnam’s real estate mogul ensnared in country’s largest $12.5 billion corruption scandal dubbed ‘Blazing Furnace

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Van Thinh Phat Holdings Group’s Chairwoman, Truong My Lan, faces the death penalty for her involvement in Vietnam‘s largest-ever $12.5 billion financial fraud. The crackdown on corruption, spearheaded by General Secretary Nguyen Phu Trong, sees 84 defendants handed sentences from probation to life imprisonment. Lan’s case underscores Vietnam‘s systemic corruption, with the ‘Blazing Furnace’ initiative targeting high-ranking officials and business leaders.

Truong My Lan, a Vietnamese real estate tycoon

Truong My Lan, a Vietnamese real estate magnate and chairwoman of Van Thinh Phat Holdings Group, receives a death sentence for her role in a $12.5 billion financial fraud, the nation’s biggest scandal yet. This verdict represents a pivotal juncture in Vietnam’s escalating anti-corruption campaign, spearheaded by Communist Party General Secretary Nguyen Phu Trong.

Following a prominent trial in Ho Chi Minh City, 67-year-old Truong My Lan faced accusations of embezzlement, bribery, and breaches of banking regulations. Despite Lan’s lawyer stating her plea of innocence and plans to appeal, the court’s ruling reflects Vietnam’s stringent stance against financial offenses.

The trial disclosed Lan’s involvement in bribery, including bribes to a central bank official who received a life sentence for accepting $5.2 million. This case aligns with the broader anti-corruption “Blazing Furnace” campaign, aiming to root out corruption from Vietnam’s government and economy.

During the trial, 84 defendants, including Lan’s husband Eric Chu and her niece, received sentences ranging from probation to life imprisonment. These verdicts underscore the widespread extent of the fraud and the vast network of individuals implicated.

Investigators discovered Lan and her accomplices diverted over 304 trillion dong from Saigon Joint Stock Commercial Bank (SCB), which she controlled via proxies, breaching regulations on large shareholdings. Between early 2018 and October 2022, after Lan’s arrest and SCB’s bailout due to a deposit run, investigators allege she obtained significant funds through loans to fictitious companies.

The central bank is aiding SCB’s intricate restructuring to resolve the legal status of assets used as collateral for VTP’s loans and bonds, valued at $1.2 billion. Lan, once a key figure in Vietnam’s finance, previously played a role in rescuing SCB, a decade before her actions precipitated a new crisis.

Vietnam’s “Blazing Furnace” anti-corruption drive has seen the prosecution or resignation of numerous senior officials and business figures. Corruption is widespread, with bribes even common for medical services in some regions, as highlighted by a UN Development Programme survey.

Truong My Lan, a prominent businesswoman overseeing a diverse company developing luxury properties, was arrested in 2022. The 67-year-old faces charges of a $12.5 billion fraud, roughly 3% of the country’s 2022 GDP.

While death sentences are not unusual in Vietnam, they are rare for financial crimes, particularly for such a well-known figure.

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Image: A News

Who is Truong My Lan?

Born in 1956, Lan initially assisted her mother, a Chinese businesswoman, selling cosmetics at Ho Chi Minh City’s oldest market, as per state media outlet Tien Phong.

In 1992, Lan and her family founded Van Thinh Phat company amidst Vietnam’s transition to a market-oriented economy. VTP evolved into one of Vietnam’s wealthiest real estate firms, associated with prestigious properties in Ho Chi Minh City, including Times Square Saigon, Windsor Plaza Hotel, Capital Place office building, and Sherwood Residence hotel, Lan’s residence before her arrest.

In 1992, Lan met her husband, Hong Kong investor Eric Chu Nap-kee, with whom she has two daughters.

What is She Accused of?

Lan was implicated in the 2011 merger of the struggling Saigon Joint Commercial Bank (SCB) with two other banks, orchestrated by Vietnam’s central bank.

Allegations suggest she exploited the bank as a personal cash reserve from 2012 to 2022, utilizing numerous “ghost companies” domestically and internationally to extend loans to herself and associates, as per government records.

These loans purportedly incurred losses of $27 billion, as reported by state media outlet VN Express on Thursday.

Accusations further include bribery of government officials – notably a former central official sentenced to life imprisonment for accepting $5.2 million in bribes – and violations of banking regulations, according to government documents.

The court handed down a death sentence, citing her actions’ infringement upon individuals’ property rights and plunging SCB into a state of special control, undermining public trust in the leadership of the Communist party and the state.

Why is This Happening Now?

Lan’s arrest in October 2022 is one of many high-profile cases in Vietnam’s intensified anti-corruption campaign since 2022.

Shortly after her trial commenced in early March, former President Vo Van Thuong resigned following involvement in the “Blazing Furnace” campaign, spearheaded by Communist Party General Secretary Nguyen Phu Trong, the nation’s influential leader.

While Lan’s arrest and the scale of the scandal shocked the country, it also prompted inquiries into potential wrongdoing by other banks or businesses, casting a shadow over Vietnam’s economic prospects and unsettling foreign investors.”

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