Businesswoman sentenced to death over $27bn fraud

Truong My Lan took out loans worth billions of dollars – EPA-EFE/SHUTTERSTOCK

A female tycoon has been sentenced to death for embezzling billions from a Vietnamese bank in one of the biggest corruption cases in history.

Businesswoman Truong My Lan was found guilty on Thursday of embezzlement, bribery and violating banking rules for her role in looting $12.5 billion (£9.95 billion) from the Saigon Commercial Bank (SCB), in a case that shocked the country and sparked a run on the bank.

Lan embezzled billions from SCB for more than a decade and prosecutors have said that total damages from the fraud now amount to $27 billion –  equivalent to six per cent of Vietnam’s GDP – which she has been ordered to return. Lan had denied the charges, instead blaming her subordinates.

“The defendant’s actions… eroded people’s trust in the leadership of the [Communist] Party and state,” read the final verdict, delivered after a five-week trial which summoned 2,700 people and featured 104 boxes of evidence, weighing a total of six tonnes.

Property empire

Lan, 67, predominantly invested her money in property, and had built a large portfolio of hotels and restaurants in some of Vietnam’s most desirable locations.

This includes Saigon Times Square – one of Ho Chi Minh City’s tallest buildings – and a five star hotel called the Sherwood Residence.

She later arranged the merger of three smaller banks into a single entity, which became SCB.

Prosecutors in the case accused her of then taking out billions in loans from the bank, which she effectively controlled through a complicated network of shell companies and proxies.

They also claimed that she ordered her driver to withdraw $4bn in cash, which she kept in her basement, and that she attempted to bribe inspectors with millions to ensure her loans were not scrutinised.

Lan became one of Vietnam’s richest people

Lan was first arrested in 2022. This sparked so much panic among depositors of SCB that it triggered a run on the bank, forcing the State Bank of Vietnam to take control. It also led to protests in Ho Chi Minh City and Hanoi – a relatively rare occurrence in the southeast Asian country.

Lan – whose family said they would appeal the verdict – looked haggard and tired during her court appearances, a far cry from her usual, glamorous appearance.

In her final statement last week, Lan told the court that “in my desperation, I thought of death”.

“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.

The case, which was heard in a colonial-era courthouse in Ho Chi Minh City, is the latest in an anti-corruption push led by Nguyen Phu Trong, the Communist Party’s secretary general, who is a conservative ideologue who considers rampant bribery a threat to Communism in Vietnam.

Dubbed the ‘blazing furnaces’ campaign, the drive has already toppled two presidents and two deputy prime ministers, with 4,400 people indicted since 2021.

Now Lan – who rose from being a market stall vendor to become one of Vietnam’s richest women – has been handed one of the most severe punishments since the crackdown began.

Analysts said it is also a sign that the party is attempting to “regain control” of the business hub, Ho Chi Minh City.

“There has never been a show trial like this, I think, in the communist era,” David Brown, a retired US state department official experienced in Vietnam, told the BBC. “There has certainly been nothing on this scale.”

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