The largest financial and banking scandal in Vietnam’s history – 1,066,000 billion VND – more than 42 billion USD.

With total financial losses of up to 42 billion USD, it can be compared to the scale of the world’s largest private corruption cases. Speaking specifically about the banking sector – this is an unprecedented number in the history of world banking.

The largest financial and banking scandal in Vietnam’s history.

Truong My Lan – The Chairman of Van Thinh Phat Holdings Group Corporation – drained the wealth of SCB bank – mainly from people’s savings deposits. This is a terrible economic case, when the defendant established more than 1,000 large and small businesses, created 916 false loan applications to appropriate more than 304 trillion VND, and incurred interest of 139 trillion VND.

Defendant Truong My Lan was arrested by the police and her husband Chu Lap Co
Defendant Truong My Lan was arrested by the police and her husband Chu Lap Co

According to the system’s sophisticated tricks, the organizations and individuals involved are divided into 4 groups: a group including hotel and restaurant companies (1), a group including real estate companies (2), a group including shell corporations in Vietnam (3), group of foreign company networks in many territories and countries (4). SCB has disbursed 2,250 loans worth more than 1 million billion VND, accounting for 93% of SCB’s total loanable amount. Records related to property acquisition and appropriation activities include 2,500 files weighing about 6 tons and about 1 million notes.

The trial is expected to last about 2 months. In addition to the 86 defendants and nearly 200 lawyers, the court also summoned more than 2,400 people with related rights and obligations for the trial of the misconduct case at SCB and Van Thinh Phat Group.

Assisting Ms. Truong My Lan were 41 SCB bank leaders, 15 former State Bank officials, 3 former government inspection officers, and a former State Audit officer who were prosecuted for the following crimes: Embezzlement assets, Accepting bribes, Abusing positions and powers while performing official duties, Lack of responsibility causing serious consequences and Violating regulations on banking operations.

Five of the 81 defendants are former leaders of SCB and its affiliates, and are currently on the run. The other 2 defendants are Sun Henry Ka Ziang, Chinese nationality, member of SCB’s Board of Directors; Lam Lee George, Canadian national, former member of the SCB Board of Directors, is also on the run.

Nearly 200 lawyers participated in defending the defendants and protecting the legitimate rights and interests of relevant parties. In addition, the trial summoned more than 2,400 people with related rights and obligations divided into 5 groups including group of individuals belonging to SCB staff (316 people); Individuals in the name of the company, loan, mortgaged assets at SCB make withdrawals (1,153 people); Legal entities belonging to the group borrowing and receiving money at SCB (692 people); individuals at the State Bank (42 people) and other related groups (201 people).

Since 2011, Ms. Lan has acquired 3 private banks to merge into Saigon Commercial Joint Stock Bank (SCB) and took advantage of the bank’s activities to mobilize capital for personal business. Ms. Lan uses SCB as a financial company to fund Van Thinh Phat’s ecosystem.

Although she does not have any position at SCB, through many individuals who own 91.5% of SCB’s shares, she directly selects and arranges trusted personnel into key leadership positions, directing the success of SCB. established three separate units under SCB. Through this trick, Ms. Lan holds absolute authority in directing bank leaders and key officials at Van Thinh Phat to withdraw SBC’s money by creating false loan documents, sometimes directing the withdrawal in advance. , complete the following profile.

By 2022, the defendant group still has 1,284 loan applications, equivalent to outstanding debt of 27.64 billion USD (principal debt 19.75 billion USD, interest/fees 7.9 billion USD), in the group that cannot be recovered. After deducting the value of collateral assets, the indictment determined that defendant Lan caused damage to SCB of about 20.3 billion USD

17.2 billion USD is calculated using the cumulative method, so the authorities only trace the cash flow of 1,284 loans. These loans have an outstanding principal balance of VND 20 billion USD, but actual disbursement is VND 21.4 billion USD.

According to the Supreme People’s Procuracy, of the 21.4 billion USD disbursed from 1,284 loans, Mrs. Lan transferred 2.32 billion USD outside the SCB system, withdrew 3.34 billion USD in cash, paid off old loans at SCB 2.32 billion USD, and transferred money internally in SCB with 212 million USD. Thus, money transferred out of the SCB system and cash withdrawal by Ms. Lan accounted for 88% of total disbursement.

So where did this money go? Chairman of Van Thinh Phat Group, Truong My Lan, after withdrawing SCB Bank, used most of the money to invest in real estate and transfer it abroad.

At the time of prosecuting the case, the total amount of money mobilized by SCB from people and other organizations was 27.5 billion USD, of which customer deposits alone were 20.87 billion USD. At that time, SCB’s total capital was 29.11 billion USD, while an independent audit determined that SCB had negative equity of 18.11 billion USD and accumulated losses of 18.96 billion USD. The Vietnamese government sent officials to take over SCB to avoid affecting the financial and banking system when the incident was exposed.

Bribery cases related to the case.

General Director in Ho Chi Minh City, Duong Tan Truoc – General Director of Tuong Viet Company, received more than 4,195 billion VND from Ms. Truong My Lan, including a ‘bonus’ of nearly 1,500 billion VND for helping implement projects.

Do Thi Nhan, the former head of the State Inspection Department received a bribe of 5.2 million USD. Ms. Do Thi Nhan is the person who follows the direction of Mr. Nguyen Van Hung (Deputy Chief Inspector in charge of Banking Inspection and Supervision, State Bank) and directly directs her subordinates to advise and develop the draft report. Report to leaders at all levels the draft inspection conclusions.

The case shows the sophistication of the defendant along with the irresistible temptation of money, causing great economic losses, affecting the reputation of the banking industry.

However, under the government’s strict investigation and supervision, the banking system operates normally and is not affected. The investigation and trial are underway and the consequences of violations are being remedied.