HANOI, Vietnam. Real estate magnate Truong My Lan faces the grim prospect of the death penalty as her trial commenced on Tuesday amidst allegations of orchestrating a massive fraud totaling $12.5 billion. This staggering sum amounts to nearly 3% of Vietnam’s GDP in 2022, marking it as the largest financial scam in the nation’s history.
The 66-year-old chairwoman of Van Thinh Phat, a prominent real estate firm, stands accused of employing a network of “thousands of ghost companies,” engaging in bribery of government officials, and flouting banking regulations, as per government reports. Allegedly, Lan unlawfully controlled the Saigon Joint Stock Commercial Bank from 2012 to 2022, diverting funds amounting to $12.5 billion for personal gain.
In a crackdown on corruption, 85 individuals, including a former State Bank of Vietnam official allegedly implicated in receiving $5.2 million in bribes, are also facing prosecution. Lan, apprehended in October 2022, could potentially face the death penalty if convicted.
Lan, escorted to the court premises by authorities around 7 a.m., was accompanied by her husband, Eric Chu Nap-kee, a real estate entrepreneur based in Hong Kong, as reported by state media outlet VN Express. Van Thinh Phat, renowned for its opulent residential complexes, office towers, hotels, and shopping malls, was among Vietnam’s leading real estate enterprises.
Lan’s arrest emerges amidst Vietnam’s vigorous anti-corruption campaign, which gained traction since 2022. Dubbed the “Blazing Furnace” initiative, this drive has ensnared thousands of officials and business figures. Its impact reverberated through the upper echelons of the Vietnamese government, culminating in the resignation of former President Nguyen Xuan Phuc and two deputy prime ministers in January 2023 due to their purported involvement in corruption scandals during the pandemic.
However, analysts caution that while the anti-corruption fervor aims to cleanse the system, it has also cast a shadow over Vietnam’s economic prospects, fostering uncertainty among foreign investors. This hesitancy is particularly pronounced amid Vietnam’s efforts to position itself as an attractive destination for businesses seeking to diversify their supply chains away from China.
Linh Nguyen, lead analyst at consultancy firm Control Risks, remarked on the unprecedented scale of Lan’s alleged misdeeds, underscoring its implications for the broader financial landscape. The voluminous documentation pertaining to the case, weighing in at 6 tons according to VN Express, underscores the magnitude of the purported scam.
Nguyen highlighted concerns regarding potential systemic malpractice within other financial institutions and businesses, suggesting that Lan’s case might only be the tip of the iceberg.
The anti-corruption crusade has also cast a pall over Vietnam’s bureaucratic machinery, leading to sluggish public spending and impeding vital development projects, as noted in a report from Singapore’s ISEAS-Yusof Ishak Institute. With over $10 billion earmarked for infrastructure projects yet to be disbursed as of October 2023, delays have become a pervasive issue, hindering progress across various sectors.
Moreover, the real estate sector, already reeling from the fallout of the anti-corruption campaign, has witnessed a downturn, with numerous firms exiting the market and developers resorting to discounts and incentives to entice buyers. Despite rental prices plummeting in urban centers like Ho Chi Minh City, vacancies persist, indicative of broader economic challenges.
Amidst subdued global demand and tepid public investment, Vietnam’s economic growth slowed to 5.05% in the previous year, a marked deceleration from the robust 8.02% recorded in 2022.
In a resolute stance against corruption, Communist Party General Secretary Nguyen Phu Trong emphasized the long-term nature of the anti-corruption endeavor. Vietnamese authorities concurrently announced investigations into additional cases linked to Lan’s real estate enterprises, shedding light on potential offshore money laundering schemes within the sector.
As Lan’s trial unfolds, Vietnam grapples with the repercussions of one of the most staggering financial scandals in its history, highlighting the imperative for comprehensive reforms to safeguard the integrity of its financial institutions and foster sustainable economic growth.
Si Venus L Peñaflor ay naging editor-in-chief ng Newsworld, isang lokal na pahayagan ng Laguna. Publisher din siya ng Daystar Gazette at Tutubi News Magazine. Siya ay isa ring pintor at doll face designer ng Ninay Dolls, ang unang Manikang Pilipino. Kasali siya sa DesignCrowd sa rank na #305 sa 640,000 graphic designers sa buong daigdig. Kasama din siya sa unang Local TV Broadcast sa Laguna na Beyond Manila. Aktibong kasapi siya ng San Pablo Jaycees Senate bilang isang JCI Senator.
