Truong My Lan is accused of swindling the cash from Saigon Commercial Bank, in which she owned a 90 per cent stake.

A top Vietnamese property tycoon went on trial on Tuesday (Mar 5) along with dozens of others, accused of embezzling US$12.5 billion in the country’s largest financial fraud case.

Truong My Lan, chair of major developer Van Thinh Phat, is said to have swindled the cash from Saigon Commercial Bank (SCB) over the course of a decade, leaving unsuspecting investors out of pocket.

Eighty-five others are also on trial in Ho Chi Minh City, including former central bankers, former government officials and ex-SCB executives – among them two Chinese nationals still at large, state media said.

They face charges including bribery, abuse of power, appropriation and violations of banking law.

State media on Tuesday showed pictures of dozens of vans carrying the defendants to the court where heavy security was on guard inside and out.

A total of 78 defendants were in court, with eight on the run, state media said. Police have issued international arrest warrants for the fugitives.

Police have identified around 42,000 victims of the scandal, which has shocked the country and led hundreds to stage protests in Hanoi and Ho Chi Minh City – a rarity in a one-party communist state that tolerates no dissent.

Lan, who is married to a wealthy Hong Kong businessman, is accused of setting up fake loan applications to withdraw money from SCB, in which she owned a 90 per cent stake.

Police say those caught up in the scam are all SCB bondholders who cannot withdraw their money and have not received interest or principal payments since Lan’s arrest in October 2022.

The value of Lan’s alleged asset appropriation, which occurred between 2012 and 2022, was equivalent to around 3 per cent of Vietnam’s GDP in 2022.

Authorities have said that the US$5.2 million allegedly given by Lan and some SCB bankers to state officials to conceal SCB’s violations and poor financial situation was the biggest bribery sum recorded in Vietnam.

According to Ho Chi Minh City’s Law newspaper, 10 prosecutors and nearly 200 lawyers will attend the trial.

Documents weighing up to six tonnes will be handled in the almost two-month-long trial, the longest ever in Vietnam.

If proven, the US$12.5 billion case could be one of the largest financial frauds in Asia. Malaysia’s 1MDB corruption scandal involved for instance about US$4.5 billion.

The arrests came as part of a national corruption crackdown that has swept up many officials and members of the country’s business elite in recent years.

Over 4,400 people have been indicted across more than 1,700 graft cases since 2021.

Other top business leaders targeted in the anti-corruption drive – and accused of massive fraud – include Truong Quy Thanh, the head of soft drink giant Tan Hiep Phat Group.

He is to be prosecuted along with his two daughters for allegedly appropriating US$31.5 million.

Do Anh Dung, chairman of developer Tan Hoang Minh Group, will also face trial for illegally acquiring US$355 million in a bond sale to more than 6,500 investors.

Lan has for years been a central figure in Vietnam’s finance and orchestrated the merger of SCB with other two lenders in 2011 to salvage the troubled banks in a plan coordinated with the central bank.

She owns several properties in Ho Chi Minh City’s richest district and has multiple assets abroad, according to investigators and public information.

Top international auditors, including Ernst & Young and KPMG, did not raise any concern about the bank in their audits, public documents show. They did not reply to requests for comment.

Despite years of the anti-graft campaign, known locally as “blazing furnace”, corruption remains widespread in the Southeast Asian country.

In some provinces, up to 90 per cent of applicants for land certificates paid a bribe, and kickbacks are also extremely common to receive medical services in public hospitals, according to a report published in March 2023 by the United Nations Development Programme and other organisations.

“Bribe-taking amounts that would trigger citizens’ denouncements ranged between 20 million dong (US$810) and 43 million dong, indicating citizens’ levels of tolerance of bribe-taking acts,” said the report, with the upper value being five times the average monthly salary in the country.

SOURCE: Agencies