How Van Thinh Phat "swindled" more than 35,000 bond investors

In the indictment against Ms. Truong My Lan (68 years old, Chairwoman of the Board of Directors of Van Thinh Phat Group) recently issued, the Supreme People's Procuracy determined that she laundered 445,747 billion VND; illegally transported 4.5 billion USD across the border; and defrauded 30,081 billion VND through the issuance of more than 308 million fake shares.

Selling fake bonds to "save SCB's dire situation"

In August 2018, SCB Bank was inspected and audited by management agencies; the application for credit from SCB by companies under Van Thinh Phat Group encountered difficulties, along with the prolonged bad debt situation, so Ms. Lan issued a policy and met with 5 key personnel of Van Thinh Phat and SCB, discussing ways to "save the situation".

These people are Ho Buu Phuong, Deputy General Director of Van Thinh Phat; Nguyen Tien Thanh, Chairman of the Board of Directors of TVSI Securities Company and 3 SCB leaders: Chairman of the Board of Directors Dinh Van Thanh; General Director Vo Tan Hoang Van and Deputy General Director Nguyen Phuong Hong.

They discussed choosing companies in the Van Thinh Phat ecosystem to issue, consult, and illegally offer individual corporate bonds, raising money from people to pay off bank debts, invest in projects, and for other personal purposes.

After discussion, 4 companies were selected to carry out the plan to issue fake bonds, including: An Dong Company; Quang Thuan Company; Sunny World Company and Setra Company.

The "KPI" that Ms. Lan and her five subordinates proposed was to use the four companies to raise a total of VND30,800 billion from selling fake bonds, thereby creating a fake cash flow to legalize primary investors for the eight companies in the same "ecosystem". The eight companies would then buy back these bonds from the four companies, issue them as individual bonds "for the purpose of selling bonds widely to tens of thousands of people", the indictment stated.

This method is similar to the method that former Tan Hoang Minh chairman Do Anh Dung and his son used to issue 90 million fake bonds, earning a profit of VND14,000 billion, which was just tried in March.

The legalization of investors for the above 8 companies was carried out by Nguyen Ngoc Duong, General Director; Nguyen Phuong Anh, Deputy General Director of SPG Company; Bui Duc Khoa, Deputy General Director of Natural Land Company using "ghost" companies and individuals hired to act as directors, general directors, own shares, and take out loans.

These "leaders" only signed fake vouchers and documents, coordinated with SCB to carry out transactions (deposit, withdraw, transfer money at the bank), creating a fake cash flow of more than 30,869 billion VND to balance the daily cash book, thereby completing the "fake" cash flow.

The bond packages of An Dong, Quang Thuan and Setra Companies were directly signed into bond sale contracts through TVSI Securities Company - the representative of the issuing organization; the Sunny World bond package was transferred to a joint stock commercial bank for investment and sale to the market.

Vo Tan Hoang Van, representative of SCB, Nguyen Tien Thanh, representative of TVSI Securities Company, coordinated to develop a training program. SCB then organized training for employees in the entire system (2,479 employees at 239 branches and transaction offices) to advise and introduce secondary investors (people) to sign bond purchase contracts with TVSI Securities Company and the above joint stock commercial bank.

Under the direction of Ms. Truong My Lan, after collecting money from selling bonds, the accomplices transferred money to individuals hired to withdraw money at SCB to conceal, "cut off the cash flow" and use all the money from selling bonds for the following purposes: repaying bank loans; paying principal and interest on bonds; spending on projects; transferring money abroad and other personal purposes of Ms. Lan, leading to the inability to pay bond buyers.

At An Dong CompanyIn the last 4 months of 2018, nearly 250 million fake bonds with a term of 5 years were successfully issued and sold to 5 companies in the Van Thinh Phat ecosystem including VIPD, VN GROUP, WMC, VTP Investment Group and DUC, to legalize the purpose of bond issuance.

The 5 companies conducted bond transactions with each other and with other companies in the Van Thinh Phat ecosystem, then transferred all of them to TVSI Securities Company to sell to the market to 30,738 investors, earning more than VND 25,300 billion.

As of the date of prosecution, October 7, 2022, An Dong Company still has an outstanding debt of VND 24,969 billion that it cannot pay.

Sunny World Companyissued 24 million bonds, total value 2,400 billion VND, still has outstanding debt of 1,600 billion VND from 6 investors, unable to pay them.

Quang Thuan CompanyIssued 15 million bonds, total value 1,500 billion VND, currently owes 1,500 billion VND to 2,649 victims.

Setra CompanyIssued 20 million bonds in August 2020, total value 2,000 billion VND, outstanding debt of 2,000 billion VND for 2,431 victims.

At Setra, the Supreme People's Procuracy also accused the company of not being qualified to issue bonds, but Chairman Tran Van Tuan and Tran Thi Lan Chi (Chief Accountant) created fake documents, changed the financial report from "loss" to "profit", and then provided it to A&C Auditing Company.

Knowing this, A&C Deputy General Director Ly Quoc Trung still directed auditor Pham Hoa Dang to issue an audit report "fully accepting" Setra's financial statements, indirectly helping Setra successfully issue bonds, even though the company did not meet the requirements. In this case, Trung and Dang were also prosecuted for fraud and appropriation of assets.

In the "deal" of swindling 30,081 billion VND through fake bonds, Ms. Truong My Lan was accused by the Supreme People's Procuracy of being the person who "controlled, operated, directed, and decided" all activities of Van Thinh Phat Group and its moves. Thus, in just 2 years, the defendants defrauded and appropriated more than 30,000 billion VND from more than 35,000 investors - meaning that each investor lost an average of 860 million VND.

In the early stages of the case, Ms. Truong My Lan was determined to have directed her accomplices to disburse a total of more than 2,500 loans to a group of companies in the Van Thinh Phat ecosystem during the 10 years of taking over SCB. By October 2022, Ms. Lan and Van Thinh Phat's group still had nearly 1,300 loans with an outstanding principal and interest of VND 677,000 billion.

On April 11, the Ho Chi Minh City People's Court sentenced Ms. Lan to 20 years in prison for bribery; 20 years in prison for violating regulations on lending in the operations of credit institutions and the death penalty for embezzlement. Combined, the defendant must serve the death penalty.