Truong My Lan is accused of looting one of Vietnam’s largest banks over a period of 11 years. It was the most spectacular trial ever held in Vietnam, befitting one of the greatest bank frauds the world has ever seen.
Behind the stately yellow portico of the colonial-era courthouse in Ho Chi Minh City, the 67-year-old Vietnamese property developer was sentenced to death on Thursday for looting one of the country’s largest banks over a period of 11 years.
It’s a rare verdict — she is one of very few women in Vietnam to be sentenced to death for a white collar crime. The decision is a reflection of the dizzying scale of the fraud.
Truong My Lan was convicted of taking out $44bn (£35bn) in loans from the Saigon Commercial Bank. The verdict requires her to return $27bn, a sum prosecutors said may never be recovered. Some believe the death penalty is the court’s way of trying to encourage her to return some of the missing billions.
Truong My Lan was convicted of taking out $44bn in loans from the Saigon Commercial Bank
The habitually secretive communist authorities were uncharacteristically forthright about this case, going into minute detail for the media. They said 2,700 people were summoned to testify, while 10 state prosecutors and around 200 lawyers were involved.
The evidence was in 104 boxes weighing a total of six tonnes. Eighty-five others were tried with Truong My Lan, who denied the charges.
All of the defendants were found guilty. Four received life in jail for embezzlement. The rest were given prison terms ranging from 20 years to three years suspended. Truong My Lan’s husband and niece received jail terms of nine and 17 years respectively.
“There has never been a show trial like this, I think, in the communist era,” says David Brown, a retired US state department official with long experience in Vietnam. “There has certainly been nothing on this scale.”
The trial was the most dramatic chapter so far in the “Blazing Furnaces” anti-corruption campaign led by the Communist Party Secretary-General, Nguyen Phu Trong.
2,700 people were summoned to testify, while 10 state prosecutors and around 200 lawyers were involved. The evidence was in 104 boxes weighing a total of six tonnes
A conservative ideologue steeped in Marxist theory, Nguyen Phu Trong believes that popular anger over untamed corruption poses an existential threat to the Communist Party’s monopoly on power. He began the campaign in earnest in 2016 after out-manoeuvring the then pro-business prime minister to retain the top job in the party.
Communist Party General Secretary Nguyen Phu Trong is leading an anti-corruption campaign. The campaign has seen two presidents and two deputy prime ministers forced to resign, and hundreds of officials disciplined or jailed. Now one of the country’s richest women has joined their ranks.
Truong My Lan comes from a Sino-Vietnamese family in Ho Chi Minh City, formerly Saigon. It has long been the commercial engine of the Vietnamese economy, dating well back to its days as the anti-communist capital of South Vietnam, with a large, ethnic Chinese community.
She started as a market stall vendor, selling cosmetics with her mother, but began buying land and property after the Communist Party ushered in a period of economic reform, known as Doi Moi, in 1986. By the 1990s, she owned a large portfolio of hotels and restaurants.
Truong My Lan’s husband and niece received jail terms of nine and 17 years respectively
Although Vietnam is best known outside the country for its fast-growing manufacturing sector, as an alternative supply chain to China, most wealthy Vietnamese made their money developing and speculating in property.
All land is officially state-owned. Getting access to it often relies on personal relationships with state officials. Corruption escalated as the economy grew, and became endemic.
By 2011, Truong My Lan was a well-known business figure in Ho Chi Minh City, and she was allowed to arrange the merger of three smaller, cash-strapped banks into a larger entity: Saigon Commercial Bank.
Vietnamese law prohibits any individual from holding more than 5% of the shares in any bank. But prosecutors say that through hundreds of shell companies and people acting as her proxies, Truong My Lan actually owned more than 90% of Saigon Commercial.
They accused her of using that power to appoint her own people as managers, and then ordering them to approve hundreds of loans to the network of shell companies she controlled.
Vietnamese law prohibits any individual from holding more than 5% of shares in any bank. But through hundreds of shell companies and people acting as her proxies, Truong My Lan owned more than 90% of Saigon Commercial
The amounts taken out are staggering. Her loans made up 93% of all the bank’s lending.
According to prosecutors, over a period of three years from February 2019, she ordered her driver to withdraw 108 trillion Vietnamese dong (more than $4bn) in cash from the bank, and store it in her basement.
That much cash, even if all of it was in Vietnam’s largest denomination banknotes, would weigh two tonnes.
She was also accused of bribing generously to ensure her loans were never scrutinised. A former chief inspector at the central bank was given a life sentence for accepting a $5m bribe.
The mass of officially sanctioned publicity about the case channeled public anger over corruption against Truong My Lan, whose fatigued, unmade-up appearance in court was in stark contrast to the glamorous publicity photos people had seen of her in the past.
over a period of three years from February 2019, she ordered her driver to withdraw over $4bn in cash from the bank, and store it in her basement
The 67-year-old illegally controlled the Saigon Joint Stock Commercial Bank (SCB) between 2012 and 2022 to siphon the funds through thousands of ghost companies and by paying bribes to government officials.
The value of her alleged asset appropriation was equivalent to about 3 percent of Vietnam’s gross domestic product (GDP) in 2022, and prosecutors said they seized more than 1,000 properties belonging to her.
Lan had denied charges levelled against her, instead blaming subordinates. In her final remarks to the court last week, she said she had thoughts of suicide.
“In my desperation, I thought of death,” she said, according to state media. “I am so angry that I was stupid enough to get involved in this very fierce business environment – the banking sector – which I have little knowledge of.”
The value of her asset was equivalent to about 3% of Vietnam’s GDP in 2022, and prosecutors seized more than 1,000 properties belonging to her
But questions are also being asked about why she was able to keep on with the alleged fraud for so long.
The trial took place in Ho Chi Minh City, where Saigon Commercial Bank was based
“I am puzzled,” says Le Hong Hiep who runs the Vietnam Studies Programme at the ISEAS-Yusof Ishak Institute in Singapore.
“Because it wasn’t a secret. It was well known in the market that Truong My Lan and her Van Thinh Phat group were using SCB as their own piggy bank to fund the mass acquisition of real estate in the most prime locations.
“It was obvious that she had to get the money from somewhere. But then it is such a common practice. SCB is not the only bank that is used like this. So perhaps the government lost sight because there are so many similar cases in the market.”
David Brown believes she was protected by powerful figures who have dominated business and politics in Ho Chi Minh City for decades.
