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Vietnam sentences real estate tycoon Truong My Lan to death in the largest fraud case ever

Vietnam sentences real estate tycoon Truong My Lan to death in the largest fraud case ever

HANOI, Vietnam (AP) – Real estate tycoon Truong My Lan was sentenced to death Thursday by a court in Ho Chi Minh City in southern Vietnam. Vietnam State media Vietnam Net said it was the largest financial fraud case ever in the country.

The head of the real estate company was 67-year-old Phan Thien Phat He was officially accused of fraud worth $12.5 billion – Nearly 3% of the country’s GDP for 2022.

State media VnExpress reported that Lan illegally took control of Saigon Commercial Joint Bank between 2012 and 2022 and authorized 2,500 loans that resulted in $27 billion in losses for the bank. The court asked her to compensate the bank in the amount of $26.9 million.

Despite the mitigating circumstances – this was a first-time offense and Lan was involved in charitable activities – the court attributed its harsh ruling to the seriousness of the case, saying that Lan was at the head of a coordinated and sophisticated criminal enterprise that had serious consequences without any harm. Refunds are possible, VnExpress said.

Its actions “not only violate the property management rights of individuals and organizations, but also push SCB (Saigon Joint Commercial Bank) into a state of private control; undermining people's confidence in the leadership of the Party and the state,” VnExpress quoted the ruling as saying.

Her niece, Truong Hieu Van, CEO of Phan Thien Phat, was sentenced to 17 years in prison for helping her aunt, and Lan's husband, Eric Chu Nap Ky, who is from Hong Kong, was sentenced to nine years in prison.

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Lan and her family created Van Thieng Phat in 1992 after Vietnam abandoned its state-run economy in favor of a more market-oriented approach that was open to foreigners. With the help of her mother, a Chinese businesswoman, she began selling cosmetics in Ho Chi Minh City's oldest market, according to state media Tian Fung.

Van Thinh Phat will grow into one of Vietnam's richest real estate companies, with projects including luxury residential buildings, offices, hotels and shopping malls. This made it a major player in the country's financial industry. It orchestrated the merger of embattled SCB Bank in 2011 with two other lenders in coordination with the Central Bank of Vietnam.

The court found that she used this approach to leverage SCB Bank for cash. She indirectly owned more than 90% of the bank — a charge she denied — and approved thousands of loans to “shell companies,” according to government documents. These loans then found their way to her, state media VnExpress reported, citing the court ruling. the findings.

She added that she then bribed officials to cover her tracks.

Former central bank official Do Thi Nhan was also sentenced on Thursday to life imprisonment for accepting bribes worth $5.2 million.

Lan's arrest in October 2022 was among the most high-profile of the ongoing arrests Anti-corruption campaign in Vietnam Which has intensified since 2022. The “Burning Oven” campaign has touched the highest levels of Vietnamese politics. Former President Vu Van Thuong resigned In March after his involvement in the campaign.

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But Lan's trial shocked the nation. Analysts said the scale of the fraud raises questions about whether banks or other companies have made similar mistakes. dampening Vietnam's economic outlook And it has made foreign investors wary at a time when Vietnam is trying to position itself as an ideal home for companies trying to shift their supply chains away from China.

Vietnam's real estate sector has been hit hard. An estimated 1,300 real estate companies will withdraw from the market in 2023, and developers are offering discounts and gold as gifts to attract buyers, although rents for mixed-use properties known in Southeast Asia as shops will fall by a third in 2023. Ho Chi Minh CityState media reported that much of the city center remained empty.

In November, Communist Party Secretary-General Nguyen Phu Trong, Vietnam's top politician, said the fight against corruption “will continue in the long term.”