“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.”She said, according to Vietnam state media.
The campaign has seen two presidents and two deputy prime ministers forced to resign, and hundreds of officials disciplined or jailed.
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Vietnam, Hanoi(ANN0-A top Vietnamese property tycoon faces a potential death sentence Thursday as she and her co-accused await verdicts in one of the biggest corruption cases in history, with an estimated $27 billion in damages.Truong My Lan, chair of major developer Van Thinh Phat, is accused of swindling cash from Saigon Commercial Bank over a decade.
More than a dozen police cars and vans carrying the defendants a list that includes former central bankers, ex-government officials and previous SCB executives arrived at the colonial-era courthouse in the early morning.
After a five-week trial in business hub Ho Chi Minh City, Lan and 85 others face verdicts and sentencing on charges ranging from bribery and abuse of power to appropriation and violations of banking law.
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.
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.
“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.”She said, according to Vietnam state media.
Hundreds of people began to stage protests in the capital Hanoi and Ho Chi Minh City, a relatively rare occurrence in the one-party communist state, after Lan’s arrest in October 2022.
Police have identified around 42,000 victims of the scandal, which has shocked the Southeast Asian country.
Lan, who is married to a wealthy Hong Kong businessman also on trial, is accused of setting up fake loan applications to withdraw money from SCB, in which she owned a 90 per cent stake.
Police say the scam’s victims are all SCB bondholders who cannot withdraw their money and have not received interest or principal payments since Lan’s arrest.
Prosecutors said during the trial they had seized more than 1,000 properties belonging to Lan.
Authorities have also said $5.2 million allegedly given by Lan and some SCB bankers to state officials to conceal the bank’s violations and poor financial situation was the largest-ever bribe recorded in Vietnam.
The woman who was offered the bribe, Do Thi Nhan, the former head of the State Bank of Vietnam’s inspection team, said during the trial the cash was handed to her in Styrofoam boxes by the former CEO of SCB, Vo Tan Van.
After realising they contained money, Nhan refused the boxes but Van declined to take them back, state media reported.
More than 4,400 people have been indicted during Vietnam’s corruption crackdown, across more than 1,700 graft cases, since 2021.
A top Vietnamese luxury property tycoon, Do Anh Dung, head of the Tan Hoang Minh group was sentenced to eight years in prison last month after he was found guilty of cheating thousands of investors in a $355 million bond scam.
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 and can appeal.
All of the defendants were found guilty. Four received life in jail. 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.
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.
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.
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.
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 (£2.3bn) 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 channelled 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.
But questions are also being asked about why she was able to keep on with the alleged fraud for so long.
“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. And he sees a bigger factor in play in the way this trial is being run: a bid to reassert the authority of the Communist Party over the free-wheeling business culture of the south.
“What Nguyen Phu Trong and his allies in the party are trying to do is to regain control of Saigon, or at least stop it from slipping away.
“Up until 2016 the party in Hanoi pretty much let this Sino-Vietnamese mafia run the place. They would make all the right noises that local communist leaders are supposed to make, but at the same time they were milking the city for a substantial cut of the money that was being made down there.”
At 79 years old, party chief Nguyen Phu Trong is in shaky health, and will almost certainly have to retire at the next Communist Party Congress in 2026, when new leaders will be chosen.
He has been one of the longest-serving and most consequential secretary-generals, restoring the authority of the party’s conservative wing to a level not seen since the reforms of the 1980s. He clearly does not want to risk permitting enough openness to undermine the party’s hold on political power.
But he is trapped in a contradiction. Under his leadership the party has set an ambitious goal of reaching rich country status by 2045, with a technology and knowledge-based economy. This is what is driving the ever-closer partnership with the United States.
Yet faster growth in Vietnam almost inevitably means more corruption. Fight corruption too much, and you risk extinguishing a lot of economic activity. Already there are complaints that bureaucracy has slowed down, as officials shy away from decisions which might implicate them in a corruption case.
“That’s the paradox,” says Le Hong Hiep. “Their growth model has been reliant on corrupt practices for so long. Corruption has been the grease that kept the machinery working. If they stop the grease, things may not work any more.”qouted by BBC.
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