Real estate tycoon Truong My Lan was sentenced to death by a court in Ho Chi Minh city in southern Vietnam for fraud amounting to $12.5 billion. Lan was accused of illegally controlling Saigon Joint Stock Commercial Bank and allowing 2,500 loans that resulted in losses of $27 billion to the bank. Despite being a first-time offender who participated in charity activities, Lan was given a harsh sentence due to the severe consequences of her actions and the unlikelihood of the money being recovered. The court highlighted that her actions violated property management rights and eroded trust in the leadership of the Party and State.
In addition to Lan, former central bank official Do Thi Nhan was sentenced to life in prison for accepting $5.2 million in bribes. Lan’s arrest in October 2022 was part of an anti-corruption drive in Vietnam known as the Blazing Furnace campaign, which has implicated high-ranking officials in the country. The scale of Lan’s trial shocked the nation, as her real estate company, Van Thinh Phat, was among the richest in Vietnam. The scandal raised concerns about potential corruption in other banks or businesses, affecting Vietnam’s economic outlook and causing unease among foreign investors looking to move their supply chains away from China.
The real estate sector in Vietnam has been severely impacted by the scandal, with 1,300 property firms exiting the market in 2023. Developers have been offering discounts and incentives to attract buyers, while rents for shophouses in Ho Chi Minh City have fallen by a third, leaving many properties vacant in the city center. This economic instability has created uncertainty in the market and made investors cautious about doing business in Vietnam. Communist Party General Secretary Nguyen Phu Trong emphasized that the anti-corruption fight would be ongoing, signaling a commitment to eradicate corruption at all levels of government and business.
The 2011 merger of SCB with two other lenders resulted in the creation of one of Vietnam’s largest commercial banks by assets. Lan’s control over the bank and subsequent financial mismanagement led to significant losses and ultimately her conviction. The court’s decision to sentence Lan to death and Nhan to life in prison reflects the severity of their crimes and the government’s determination to combat corruption at all levels. The impact of Lan’s fraud case on Vietnam’s economy and reputation as a business-friendly destination has been significant, with foreign investors reevaluating their presence in the country.
Despite Lan’s involvement in charity activities and being a first-time offender, the court’s decision to impose such severe punishments on her and Nhan underscores the seriousness of their actions and the need to address corruption in Vietnam. The Blazing Furnace campaign has exposed corruption in various sectors and implicated high-ranking officials, signaling a commitment to rooting out corrupt practices. Vietnam’s efforts to position itself as an attractive destination for foreign investment may be hindered by the fallout from Lan’s case, but the government’s pledge to continue the anti-corruption fight indicates a willingness to address these issues and rebuild trust in the country’s economy.
