Vietnam upholds tycoon Truong My Lan's death sentence unless she pays $9 bn

Real estate tycoon Truong My La has been ordered to pay three-quarters of the amount she is accused of defrauding to have her ruling reduced to a life sentence

A court in Vietnam has upheld the death sentence for prominent real estate tycoon Truong My Lan, marking a pivotal moment in the country’s largest financial fraud case to date. However, the court announced that the sentence could be reduced to life imprisonment if Lan reimburses $9 billion, equating to three-quarters of the embezzled amount.

 

What happened?

Truong My Lan, 68, a leading figure in Vietnam’s real estate industry and chairperson of Van Thinh Phat Group, was convicted earlier this year of defrauding the Saigon Joint Stock Commercial Bank (SCB) of $12.5 billion.

 

Prosecutors argued that Lan manipulated the bank’s operations from 2012 to 2022, orchestrating over 2,500 fraudulent loans that led to colossal financial losses.

 

 

The scale of her fraud, which roughly equates to 3 per cent of Vietnam’s GDP, shocked the nation. This has also raised concerns about similar risks across other financial institutions and businesses.

 

Pay or face execution: Vietnam court’s ruling

On Tuesday, a higher court in Ho Chi Minh City dismissed Lan’s appeal, citing a lack of grounds to reduce her sentence. However, the court indicated that if she returns three-quarters of the defrauded amount, equivalent to around $9.2 billion, her sentence could be commuted to life imprisonment.

 

Truong My Lan’s defense

Despite her lawyers arguing that she had already reimbursed some funds, the court rejected the claim due to unresolved legal issues surrounding seized assets.

 

Lan’s defence team also cited her cooperation, remorse, and partial repayment as mitigating factors, but these were deemed insufficient given the severe impact of her actions on Vietnam’s banking system and public trust.

 

Vietnam’s ‘Blazing Furnace’ anti-corruption drive

Lan’s case is part of Vietnam’s ongoing anti-corruption drive, known as the ‘Blazing Furnace’ campaign, which has targeted influential persons across politics and business. Her arrest in 2022 highlighted the government’s intensified efforts to tackle financial malpractices.

 

Lan’s company, Van Thinh Phat, was founded in 1992 during Vietnam’s transition to a market economy. The firm became one of the country’s most prominent real estate developers, known for luxury residential and commercial properties. Lan also played a pivotal role in the 2011 merger of SCB with two other banks, a move that prosecutors claim she exploited to siphon funds and secure loans for ghost companies.

 

In a separate trial in October this year, Lan received another life sentence for raising $1.2 billion through illegal bond sales and for misappropriating $18 billion via fraudulent activities.

 

Death sentences in Vietnam

Under Vietnamese law, death sentences are not carried out immediately and allow for an extended appeals process. Lan can still petition the country’s president for clemency. Experts suggest she is likely to pursue this route while attempting to meet the court’s condition for reducing her sentence.

 

The case has had far-reaching consequences for Vietnam’s economic outlook. The fraud scandal has unsettled foreign investors and drawn attention to governance lapses in the financial sector. The ruling also serves as a stark reminder of Vietnam’s anti-corruption laws where the death penalty still applied in cases of severe financial crimes.