Vietnam’s financial landscape was rocked as real estate tycoon Truong My Lan was sentenced to death by a court in Saigon, following the country’s largest-ever financial fraud case. Lan, aged 67 and chair of Van Thinh Phat real estate company, faced charges of orchestrating a massive fraud amounting to US$12.5 billion, nearly three percent of Vietnam’s 2022 GDP.
The court found that Lan illicitly controlled Saigon Joint Stock Commercial Bank (SCB) between 2012 and 2022, approving 2,500 fraudulent loans leading to US$27 billion in losses for the bank. Lan was ordered to compensate the bank US$26.9 million.
Despite Lan’s charitable activities and it being her first offense, the court handed down the severe sentence due to the orchestrated and sophisticated nature of the criminal enterprise, which caused irreparable harm with no chance of recovery, according to VnExpress. Lan’s actions not only violated property rights but also eroded trust in the state leadership.
Lan’s arrest in October 2022 was part of Vietnam’s intensified anti-corruption drive, known as the ‘Blazing Furnace’ campaign, which has implicated high-level officials, including former President Vo Van Thuong who resigned in March.
The trial raised concerns about broader systemic issues in Vietnam’s financial sector, impacting investor confidence and the real estate market. The ramifications of Lan’s actions have reverberated through Vietnam’s economy, particularly affecting the real estate sector. Thousands of property firms withdrew from the market in 2023, developers resorted to discounts and incentives, and Saigon witnessed a decline in shophouse occupancy despite rent reductions.
Communist Party General Secretary Nguyen Phu Trong affirmed that the anti-corruption efforts would continue, signaling a commitment to long-term reforms in Vietnam’s financial and political spheres.
