I amIt was Southeast Asia's biggest scam, costing $12.5 billion and implicating some of Vietnam's top bankers and officials. On Thursday, a Ho Chi Minh City court reached its verdict: Truong My Lan, a 67-year-old businessman who started hawking cosmetics from a market stall in the southern city before founding Van Dinh Phat in 1992, was sentenced to death. , a sprawling company that developed luxury apartments, offices, hotels and shopping malls.
In 2011, Lan was enlisted to merge the troubled Saigon Joint Commercial Bank, or SCP, with two other lenders in a plan overseen by Vietnam's central bank. But until his arrest in 2022, he was accused of using SCB as his personal piggy bank, swindling billions through illegal loans and conspiring through thousands of shell companies at home and abroad. The verdict is the first death sentence for a private businessman for a financial crime.
The case has sent shock waves through Vietnam's business community and is the highest collar of Communist Party General Secretary Nguyen Phu Trong's massive “burning furnace” anti-corruption campaign. A family member told Reuters he wanted the full impact of Lan's sentence AppealThe clear implications for international companies towards Vietnam as they diversify their supply chains away from China are still unknown.
Nguyen Khác Giang, Visiting Fellow of ISEAS-Yusof Ishak's Vietnam Study Program in Singapore, said, “This trial is an example of Vietnam's efforts to eradicate corruption not only in the public sector but also in the private sector. .
It was clear that Vietnam was trying to make an example of Lan. As befits a one-party autocracy, a guilty verdict in a trial that began a few weeks ago would not have been in doubt, but it was not a shadow verdict far out of the public eye. Lan was tried along with 84 other defendants, including her husband (he Sentenced Nine years imprisonment), close relatives, 45 SCB employees (incl Three administrators Sentenced to life imprisonment), 15 former officials from the State Bank of Vietnam, three officials from the State Inspectorate and one from the State Audit Office. The trial involved 10 state prosecutors, about 200 lawyers and 2,700 witnesses. The evidence packed into 104 boxes weighs six tonnes. The local media were given detailed briefings by the party committee, which is read as top secret.
“The defendant's actions not only violate the property management rights of individuals and companies, but also put the SCB under scrutiny, undermine people's trust in the leadership of the party and the state,” state newspaper VnExpress quoted the jury as saying. reports Reuters.
Vietnam is keen to portray the verdict as a victory for clean governance. Under Trang, Vietnam's corruption ranking steadily improved, leading to a boom in foreign direct investment. Samsung, LG and Apple are among several foreign companies that have plowed billions into high-tech manufacturing in Vietnam, implementing ambitious plans to transform the once war-torn Southeast Asian nation of 100 million. Upper-middle income economy By 2030 and a High income economy By the year 2045. The Hanoi government is also promoting domestic champions such as VinGroup, whose VinFast electric vehicle subsidiary is building a $4 billion factory in North Carolina.
“In the long run, if they clean up the market and eliminate toxic and illegal business practices, it's good for the economy as a whole and something that investors should welcome,” said Le Hong Hiep, senior partner at ISEAS -Youssef Ishak Institute.
Yet the scale and brazenness of Lan's crimes leave many questions unanswered. After all, someone who built a huge real estate empire in a Leninist country where all land was officially owned by the state. That wouldn't happen without elite connections and protections. According to prosecutors, Lan's loans accounted for 93% of all SCB's loans, while over three years he is accused of withdrawing the Vietnamese equivalent of $4 billion and stashing it in his basement. It beggars belief that not a single senior party official figures among his numerous co-conspirators. “I cannot believe that the party apparatus and Ho Chi Minh City are innocent and not involved,” says Carlyle Thayer, a professor emeritus at the University of New South Wales in Australia.
In fact, the party side of the purge may already be in motion—quietly, out of sight, one scandal before another. In March 2020, Vietnam's investigative committee recommended disciplinary action against two party leaders in Ho Chi Minh City—Le Thanh Hai, secretary of the city's party committee, and is known “Pass hi;” and Le Hoang Quan, former chairman of the city's Standing Committee—for serious violations related to a vast development project in Vietnam's largest municipality.
This influential pair led Lan's meteoric rise and subsequent fall. Why they (or anyone else in Ho Chi Minh City) have not yet become more implicated in Lan's crimes remains a matter of dispute, although with both already convicted, the Party may have decided against washing too much dirty laundry in public. Not least from Removal of two presidents A year amid corruption allegations has already raised unsavory scrutiny of official malfeasance.
However, the harsh punishment handed down to Lan is already having consequences, with businesses complaining of “bureaucratic paralysis” as officials are now too afraid to do their jobs. “Even approving a new project takes a lot of time because people are so afraid of making decisions,” Jiang says. Hipp, meanwhile, says Lan's death sentence could be counterproductive and could be overturned on appeal. “The key point now is to recover losses and maintain investor confidence in the judicial system and the economy,” Hipp says. “Giving her the death penalty won't help matters at all.”
Of course, increasing investments in Vietnam is one championed by Washington, which elevated bilateral ties to a comprehensive strategic partnership when President Joe Biden visited Hanoi in September. Vietnam is now Apple's largest manufacturing hub outside of China and the Cupertino behemoth produces iPads, AirPods and Apple Watches. Last month, Secretary of State Anthony Blinken welcomed Vietnamese Foreign Minister Bui Thanh Son traveled to Washington, DC, where they pledged to expand cooperation on semiconductors, supply chain diversification, and stability and prosperity in the South China Sea.
Today, countering Beijing's regional assertiveness is a priority for the US, but Lan's fate shows that China and Vietnam are similar beasts at their core. On Thursday, more than 60 human rights and environmental rights organizations wrote a letter to Apple to highlight Ngo Thi To Nhien, executive director of the Vietnam Initiative for Energy Transition, an independent think tank focused on green energy policy, was detained on September 15—the latest in a series of crackdowns on environmentalists.
“All of these companies say their supply chains are 'dangerous' by moving from China to Vietnam,” said Bill Robertson, deputy Asia director at Human Rights Watch. “But what are they really supporting? Corporations with the most extravagant codes of conduct are investing in a country where human rights abuses are systematic and widespread. Lan's case shows that even as America's rivals have changed, Vietnam's autocracy is clearly intact.
“I don't think it will increase confidence in the system,” said Alexander Wooing, a professor at the Asia Pacific Center for Security Studies in Hawaii. “For the business community, this is another example [officials] Fighting each other, corruption and the unpredictability of the environment.
