Where did more than one million billion VND that Ms. Truong My Lan withdrew from SCB go?

Faced with violations that were assessed as "organized, sophisticated, and cunning", Ms. Truong My Lan, Chairwoman of Van Thinh Phat Group, was prosecuted by the Supreme People's Procuracy for three crimes: bribery, violation of regulations on banking activities, and embezzlement of assets.

Among the remaining 85 defendants prosecuted by the Procuracy are 45 leaders and officials of SCB Bank; 15 former officials of the State Bank; 3 former officials of the Government Inspectorate; and one former official of the State Audit.

Authorities accused Van Thinh Phat of having more than 1,000 "ghost" companies at home and abroad, with no business activities, divided into many layers to form "an ecosystem". In which, Van Thinh Phat is the center, controlling all activities. The "ghost" companies were mainly set up by Ms. Lan to serve the purpose of taking out fake loans and transferring shares.

Ms. Lan was accused of taking advantage of the bank's operations to raise capital for her personal business, thereby taking over three private banks and establishing Saigon Commercial Bank (SCB). Although she did not hold a position at SCB, Ms. Lan held a controlling stake in the bank of more than 91%, "being the person with the highest power, absolutely managing all activities of SCB". She directly selected and arranged trusted personnel to key leadership positions. She directed the establishment of three separate units under SCB to disburse loans according to her request.

The investigation results determined that from 2012 to October 2022, Ms. Lan directed the creation of fake documents and SCB disbursed more than 2,500 loans to her group (1,000 loans to individuals, 1,500 loans to organizations) with a total amount of more than VND 1,066,600 billion. When disbursing, SCB will transfer to individuals or legal entities according to the loan plan.

Compared to the scale of Vietnam's GDP (at the end of the third quarter of this year, it was 4.7 quadrillion VND), the 1,066,600 billion VND (43.96 billion USD) that SCB disbursed to Ms. Lan's group is estimated to account for about 22.6%. This amount is also 3 times the total investment of the "super project" Long Thanh airport (336,630 billion VND), 7 times the total investment of 12 North-South expressway projects (147,000 billion VND).

As of October 2022 (the time of prosecution), Ms. Lan's group still had 1,284 loans with an outstanding debt of VND 677,200 billion, of which VND 483,900 billion was principal and VND 193,300 billion was interest. The outstanding principal accounted for 93% of the total outstanding principal of more than 23,000 outstanding loans at SCB. Currently, these debts are not recoverable.

According to the Supreme People's Procuracy, of the VND525,400 billion disbursed from 1,284 loans, Ms. Lan transferred VND57,000 billion out of the SCB system, withdrew VND81,800 billion in cash, paid off old loans at SCB VND57,000 billion, and transferred internally within SCB VND5,200 billion. Thus, the money transferred out of the SCB system and cash withdrawn by Ms. Lan accounted for 88% of the total disbursed money.

How Ms. Lan used these funds has not been shown in the indictment. However, the Supreme People's Procuracy determined that when the money was withdrawn from the bank, she would direct her subordinates to transfer it from the disbursed company to the accounts of "ghost" legal entities and individuals. When needed, the female chairwoman requested "circular transfers" within companies in the Van Thinh Phat ecosystem to avoid being audited.

If she needed cash, Ms. Lan would instruct her staff to make fake procedures to legalize the withdrawal documents. After cash left the bank, Ms. Lan would instruct the driver to use a car to take it to her private home at Sherwood Building, 127 Pasteur, District 3, Ho Chi Minh City or to the headquarters of Van Thinh Phat Group at 193-203 Tran Hung Dao, Ho Chi Minh City.

From February 2019 to September 2022, the driver transported VND108,000 billion and USD14.7 million (about VND355 billion) in cash from SCB to Ms. Lan's house or Van Thinh Phat headquarters. Many times, Ms. Lan directed the driver to give it to a number of people.

The prosecution agency said that based on the principle of favoring the accused, Ms. Lan was accused of appropriating VND304,000 billion and causing a loss of VND129,000 billion in interest arising from the misappropriated principal. In addition, Ms. Lan caused a loss of more than VND64,600 billion to SCB by violating the bank's lending regulations.

Ms. Lan was accused of bribing the inspection team by directing her subordinates to bribe Ms. Do Thi Nhan, former Director of the State Bank's Inspection and Supervision Department, up to 5.2 million USD.

SCB has a head office, 50 branches and 184 transaction offices nationwide. According to authorities, the bank only serves Ms. Lan's personal interests, so at the time of the inspection in mid-2017, SCB "had a very bad financial situation" with bad debt of more than 20%.

At the time of the case's initiation, the total amount of money SCB mobilized from people and other organizations was VND673,500 billion, of which customer deposits alone were VND511,200 billion. At that time, SCB's total capital was VND713,400 billion, while independent audit determined that SCB had negative equity of VND443,700 billion, with accumulated losses of VND464,500 billion.

According to the indictment, except for Ms. Lan and the five defendants who are on the run, the remaining 80 people have confessed honestly and repented. Many defendants have actively cooperated with the investigation agency to clarify the nature of the case and paid money and assets to remedy the consequences.