A court in Ho Chi Minh City, Vietnam, has handed down a death sentence to a prominent real estate tycoon, Truong My Lan, following the country's largest financial fraud case to date. The 67-year-old chair of Van Thinh Phat, a leading real estate company, was found guilty of orchestrating a massive fraud scheme amounting to $12.5 billion, which equates to nearly 3% of Vietnam's 2022 GDP.
Lan was accused of illegally controlling the Saigon Joint Stock Commercial Bank from 2012 to 2022, using the institution to siphon off funds through a network of ghost companies and by bribing government officials. Her arrest in October 2022 marked a significant development in Vietnam's ongoing anti-corruption campaign, known as the Blazing Furnace, which has targeted high-ranking officials and business figures.
The scale of Lan's trial has sent shockwaves across the nation, as Van Thinh Phat was one of Vietnam's wealthiest real estate firms, known for its luxury residential projects, offices, hotels, and shopping centers. The revelation of the scam has raised concerns about potential misconduct in other banks and businesses, impacting Vietnam's economic prospects and causing unease among foreign investors looking to diversify away from China.
The real estate sector in Vietnam has been severely affected by the fallout, with over 1,300 property firms exiting the market in 2023. Developers have resorted to offering discounts and incentives like gold gifts to attract buyers, while rental prices for shophouses in Ho Chi Minh City have plummeted by a third, leaving many prime locations vacant.
In a statement in November, Communist Party General Secretary Nguyen Phu Trong emphasized the government's commitment to a sustained anti-corruption campaign, signaling that the crackdown will persist in the long term to uphold transparency and accountability in Vietnam's business landscape.
