How did Ms. Truong My Lan appropriate 31,000 billion VND from nearly 36,000 people?

The actions of Ms. Truong My Lan (68 years old, Chairwoman of the Board of Directors of Van Thinh Phat Group) and her accomplices were stated in the investigation conclusion that the Ministry of Public Security's Investigation Police Agency (C03) has just completed and transferred to the Supreme People's Procuracy to propose prosecution for the crime of fraud and appropriation of property.

The investigation concluded that in 2018, Saigon Commercial Joint Stock Bank - SCB (Ms. Lan owns over 91.5% of shares) was under inspection and examination by management agencies; credit application faced many difficulties along with a prolonged bad debt situation.

To deal with SCB's financial difficulties, Ms. Lan met with Dinh Van Thanh (Chairman of the Board of Directors, absconded), Vo Tan Hoang Van (General Director), Nguyen Phuong Hong (Deputy General Director of SC, deceased); Nguyen Tien Thanh (Chairman, General Director of Tan Viet Securities Company - TVSI) and Ho Buu Phuong (Deputy General Director of Van Thinh Phat) to propose the policy of "using An Dong Company and other companies to issue individual bonds to mobilize money from the people".

Ms. Lan and senior staff of SCB and Van Thinh Phat Group met to discuss and agree on a plan to issue bonds through Tan Viet Securities Company and SCB to sell to people with interest rates higher than savings interest rates at this bank.

Where is the bondholder's money?

Implementing Ms. Lan's policy, from 2018 to 2020, the defendants involved at TVSI, SCB and Van Thinh Phat Group used 4 companies including: An Dong Investment Group Joint Stock Company; Quang Thuan Investment Joint Stock Company; Sunny World Investment and Development Joint Stock Company and Setra Company to issue 25 fake bonds, without collateral, with a total volume of nearly 309 million bonds to defraud investors, earning more than 30,869 billion VND.

"This money was not used for the purpose of issuing bonds, which was to invest in economic projects to generate profits and ensure the obligation to repay principal and interest to bondholders, but the defendants withdrew the money and used it for other purposes, leading to insufficient funds to pay principal and interest to bondholders," C03 stated. As of the time of prosecution (October 7, 2022), the above 4 companies still had outstanding debts of VND 30,081 billion from 35,824 victims who were unable to pay.

Regarding this amount of VND 30,869 billion, the authorities determined that Ms. Lan directed Nguyen Phuong Hong (member of the Board of Directors, former Deputy General Director of SCB) to directly operate, manage and monitor its use for many purposes of the group. Of which, the majority of the embezzled money was transferred to credit institutions to pay off loans of individuals and organizations belonging to Van Thinh Phat Group, repay loans to individuals, pay interest on due bonds, take care of customers, pay off credit cards of relatives and withdraw cash for use.

According to the investigation agency, from September 2018 to March 2020, the use of the above amount of money was mixed with many other amounts such as: loans from SCB, other banks, personal loans... creating a cash flow of over 61,750 billion VND. Of which, the investigation agency was only able to separate more than 11,171 billion VND originating from bond issuance, the rest was mixed.

Ms. Truong My Lan wants organizations and individuals to overcome this together.

Ms. Lan was identified as the mastermind and leader. During the investigation, she admitted that she had proposed the policy of issuing bonds of the group's companies in violation of the law, took responsibility for her wrongdoings, and pledged to use all assets that had been seized and confiscated in phase one (according to the verdict of the Ho Chi Minh City People's Court in April) to prioritize remedying the consequences for the victims.

At the same time, she hopes that organizations and individuals using money from bond mobilization sources will take responsibility for remedying damages to bondholders.

In addition to the accusation of defrauding and appropriating money from more than 35,824 bondholders, Ms. Lan and three other accomplices: Nguyen Phuong Anh, Deputy General Director of Saigon Peninsula Group Joint Stock Company; Trinh Quang Cong, General Director of Acumen Management Group Joint Stock Company; Truong Khanh Hoang, former Acting General Director of SCB Bank, were also accused of money laundering and illegal transportation of currency across borders.

Nearly 30 other defendants, including Truong Hue Van (Mrs. Lan's niece) and Chu Lap Co (Mrs. Lan's husband), were accused of being accomplices in one of the crimes of fraud, money laundering, or illegal transportation of currency across the border.

Regarding the second phase of the case that occurred at Van Thinh Phat Group and SCB Bank, there are 3 defendants, Dinh Van Thanh and 2 foreigners, who were prosecuted but have fled, so the investigation agency has temporarily suspended the case and will separate it for later handling.

In the initial phase, Ms. Truong My Lan was accused of directing 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 acquiring 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.