Vietnam sentences real estate tycoon to death in $12B fraud case

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In the biggest financial fraud case in Vietnam’s history, real estate mogul Truong My Lan was found guilty on Thursday and given the death penalty by a Ho Chi Minh City court, according to state media Thanh Nien.

The 67-year-old chair of the real estate firm Van Thinh Phat faces fraud charges totaling $12.5 billion, or almost 3% of the GDP of the nation in 2022. Between 2012 and 2022, she illegally controlled the Saigon Joint Stock Commercial Bank, using it to syphon off funds through thousands of fictitious companies and bribing government officials.

During the ongoing and intensifying anti-corruption campaign in Vietnam since 2022, Lan’s arrest in October 2022 was one of the most well-known. Vietnamese politics at the highest levels have been impacted by the so-called Blazing Furnace campaign. Following his involvement in the campaign, former president Vo Van Thuong announced his resignation in March.

However, the country has been shocked by the scope of Lan’s trial. VTP was among Vietnam’s richest real estate firms, with projects including luxury residential buildings, offices, hotels and shopping centers. The scope of the scam, according to analysts, begged the question of whether other companies or banks had made comparable mistakes, dimming Vietnam’s economic prospects and unsettling foreign investors at a time when Vietnam has been attempting to present itself as the perfect location for companies looking to shift their supply chains away from China.

Vietnam’s real estate market has been particularly severely affected: According to state media, developers have been luring buyers with discounts and gifts of gold, and even though shophouse rent in Ho Chi Minh City has dropped by a third, many of the city’s center’s properties remain unoccupied. An estimated 1,300 real estate companies left the market in 2023.

Vietnam’s leading politician, Nguyen Phu Trong, the general secretary of the Communist Party, declared in November that the fight against corruption would “continue for the long term.”

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