- Written by Jonathan Head & Tu Bui
- in bangkok
It was the most spectacular trial ever held in Vietnam and was fitting for one of the largest bank frauds in world history.
Behind the stately yellow portico of a colonial-era courthouse in Ho Chi Minh City, a 67-year-old Vietnamese real estate developer was sentenced to death on Thursday for plundering one of the country's largest banks over an 11-year period. Ta.
This is an unusual ruling. She is one of the few women sentenced to death for white-collar crimes in Vietnam.
This decision reflects the dizzying scale of the fraud. Truong My Lan was found guilty of taking out $44 billion (£35 billion) in loans from Saigon Commercial Bank. In her judgment, she seeks restitution of $27 billion, an amount that prosecutors say may never be recovered. Some believe her death penalty is the court's way of urging her to return some of her lost billions of dollars.
The traditionally secretive communist authorities were uncharacteristically candid about the incident, providing details to the media. 2,700 people were subpoenaed to testify, and 10 state prosecutors and about 200 lawyers were involved.
The evidence was contained in 104 boxes weighing a total of 6 tonnes. The other 85 people tried alongside Truong My Lan deny the charges and can appeal.
All defendants were found guilty. Four received life sentences. The remainder of the sentence was sentenced to 20 years to 3 years suspended. Truong My Lan's husband and her niece were sentenced to nine and 17 years in prison, respectively.
“I don't think there were any show trials like this during the communist era,” says David Brown, a retired U.S. State Department official with extensive experience in Vietnam. “Certainly there has never been anything else like this.”
The trial was the most dramatic chapter yet in the anti-corruption campaign led by Communist Party General Secretary Nguyen Phu Trong.
Nguyen Phu Trong, a conservative ideologue steeped in Marxist theory, believes popular anger over unchecked corruption poses an existential threat to the Communist Party's monopoly on power. He began his election campaign in earnest in 2016 after outwitting the pro-business prime minister at the time to retain his party leadership.
The campaign forced the resignation of two presidents and two deputy prime ministers, and resulted in hundreds of officials being disciplined or jailed. Now, one of the country's richest women has joined their ranks.
Truong My Lan comes from a Chinese-Vietnamese family living in Ho Chi Minh City, formerly Saigon. It has long been a commercial engine of Vietnam's economy, dating back to when it was home to a large Chinese community and the anti-communist capital of South Vietnam.
She started out as a street vendor selling cosmetics with her mother, but after the Communist Party ushered in a period of economic reform known as Doi Moi in 1986, she began buying land and real estate. By the 1990s, she had a large portfolio. hotels and restaurants.
Vietnam is best known abroad for its burgeoning manufacturing industry as an alternative supply chain to China, but most wealthy Vietnamese made their money developing and speculating in real estate.
All land is officially state-owned. Access to it often depends on personal relationships with state officials. As the economy grew, corruption escalated and became endemic.
By 2011, Truong My Lan had become a well-known businessman in Ho Chi Minh City and was granted permission to arrange the merger of three cash-strapped small banks into a larger organization, Saigon Commercial Bank.
Vietnamese law prohibits individuals from owning more than 5% of a bank's shares. But prosecutors allege that Truong My Lan actually owned more than 90% of Saigon Commercial's shares through hundreds of shell companies and people acting on her behalf.
They accused her of using that power to appoint her subordinates as managers and then order them to approve hundreds of loans to a network of shell companies she controlled.
The amount of money being taken out is staggering. Her loans accounted for her 93% of the bank's total loans.
Prosecutors said that over a three-year period starting in February 2019, she ordered drivers to withdraw more than $4 billion (£2.3 billion) in cash, or VND108 trillion, from banks and store it in the basement of her home.
That much cash, even if it was all Vietnam's largest denomination banknotes, would weigh up to two tons.
She was also accused of offering generous bribes to ensure the loans were never scrutinized. A former central bank chief inspector has been sentenced to life in prison for accepting $5 million in bribes.
A large amount of officially sanctioned publicity about the incident directed public anger at Truong My Lan against corruption. Her exhausted and makeup-free appearance in court was in stark contrast to the glamorous publicity photos people have seen of her in the past.
But questions have also been raised as to why she was able to sustain the fraud charges for so long.
“I'm perplexed,” said Le Hong Hiep, who runs the Vietnam research program at Singapore's Yusof Ishak Institute ISEAS.
“It was no secret that Truong My Lan and her Van Tinh Phat Group used SCB as their piggy bank to fund bulk purchases of real estate in the most prime locations. What we offer is well known in the market.
“It was clear that she had to get the money from somewhere. But it is a very common practice. SCB is not the only bank used in this way. So perhaps the government There are so many similar incidents that we probably lost track of the market. “
David Brown believes he has been protected by the powerful people who have dominated business and politics in Ho Chi Minh City for decades. And he sees a larger factor at play in the way the trial was run: reaffirming the Communist Party's authority over the South's freewheeling business culture.
“What Nguyen Phu Trong and his comrades in the party are trying to do is to take back control of Saigon, or at least prevent Saigon from fleeing.
“Until 2016, the party in Hanoi pretty much let this Chinese-Vietnamese mafia run the place. They were making all the right noises that local communist leaders should be making, but at the same time they were significantly The money that was being made there was being squeezed out of the city in order to obtain a large income. ”
Party leader Nguyen Phu Trong, 79, is in precarious health and is almost certain to retire at the next Communist Party congress in 2026, when a new leader will be elected.
He was one of the longest-serving and most successful general secretary, restoring the conservative wing of the party to a level not seen since the reforms of the 1980s. He clearly does not want to risk allowing too much openness to undermine his party's grip on political power.
However, he is caught in a certain contradiction. Under his leadership, the party has set an ambitious goal of achieving a technology- and knowledge-based economy and achieving rich nation status by 2045. This is the driving force behind an increasingly close partnership with the United States.
However, Vietnam's rapid growth almost inevitably means increased corruption. If we fight too much corruption, we risk eradicating much economic activity. There have already been complaints of stagnation in the bureaucracy as officials avoid decisions that could implicate them in corruption cases.
“That's the contradiction,” says Lee Hong Hiep. “For too long, their growth model has relied on corrupt practices. Corruption has been the lubricant that keeps the machine running. If they turn off that lubricant, things may no longer work. ”