Death sentence for Truong My Lan

On April 11, after more than a month of trial and deliberation, the Trial Panel of the first instance trial of the case that occurred at Van Thinh Phat Group Joint Stock Company, Saigon Commercial Joint Stock Bank (SCB) and related companies, units and organizations announced the verdict. Defendant Truong My Lan (former Chairwoman of the Board of Directors of Van Thinh Phat Group Joint Stock Company) received the death penalty.

Specifically, defendant Truong My Lan received the death penalty for the crime of "Embezzlement of property"; 20 years in prison for the crime of "Bribery" as prescribed in Clause 4, Article 353, Clause 4, Article 364 of the 2015 Penal Code, amended and supplemented in 2017; 20 years in prison for the crime of "Violating regulations on banking activities and other activities related to banking activities" as prescribed in Clause 3, Article 179 of the 1999 Penal Code. The total sentence is the death penalty.

According to the Trial Panel, at the trial, although the defendants had different perceptions of the crime, they all admitted to the crime. Defendant Truong My Lan said that she only put her assets into SCB Bank to serve the restructuring, so the indictment's allegation that she owned 91.5% of SCB Bank's shares was incorrect; the defendant only owned nearly 5% of the shares.

Truong My Lan also said that the defendant only mobilized relatives, friends, and investors to participate in restructuring at the encouragement of some State Bank officials.

In addition, Truong My Lan said that SCB Bank operates according to the law. The defendant herself did not place her trusted relatives in important positions at the bank. Defendant Lan also denied instructing her subordinates to set up a "ghost" company to create fake loan documents; affirmed that she did not collude with valuation companies to inflate assets.

Lan confirmed that she was authorized by the two defendants Dinh Van Thanh (former Chairman of the Board of Directors of SCB Bank, who has absconded) and Vo Tan Hoang Van (former General Director of SCB Bank) to meet privately with the defendant Do Thi Nhan (former Director of the Department of Banking Inspection and Supervision II (Department II), Banking Inspection and Supervision Agency, State Bank) twice to request an early conclusion of the inspection, but did not admit to directing Dinh Van Thanh and Vo Tan Hoang Van to give bribes to Nhan.

In response to the defense opinions of Truong My Lan and her lawyer, the Trial Panel stated that during the investigation and trial, the defendants' testimonies were consistent with the documents and evidence in the case file, and there was sufficient basis to determine that Truong My Lan had acquired and held up to 91.5% of SCB Bank's shares through individuals and legal entities in her name; thereby, dominating and controlling all activities of this bank.

Accordingly, before merging three weak banks, Ficombank, TinNghiaBank and Saigon (SCB), into SCB, Lan owned shares of TinNghiaBank. During its operation, it provided credit to the Times Square project of defendant Chu Lap Co (former Chairman of the Board of Directors of Times Square Investment Joint Stock Company, husband of Truong My Lan).

Regarding the 5 foreign shareholders, during the investigation, Lan stated that she had received the transfer of shares from these 5 shareholders. However, in reality, the foreign shareholders have not participated in the shareholders' meeting for a long time.

Therefore, the defense of the lawyers that Lan and her family only hold about 15% of SCB shares is baseless. Holding 91.5% of SCB shares shows that Lan is actually a major shareholder of SCB, the person who has the right to select and arrange key positions at the bank.

The panel of judges also rejected the defense of Truong My Lan’s lawyers that debt restructuring is permitted by law. The panel of judges affirmed that there is no legal provision permitting this activity. In addition, the lawyers’ claim that Truong My Lan transferred assets to SCB to pay off old debts, in order to restructure old debts, is also not acceptable.

The investigation results determined that the loans of the Van Thinh Phat group at SCB Bank were mostly made by newly established legal entities. The defendants at SCB, under the direction of Truong My Lan, disregarded legal regulations to legalize and approve fictitious loans of the Van Thinh Phat group, even disbursing many loans before the documents were legalized; thereby, helping Lan appropriate large sums of money from the bank for personal use.

The above acts of Truong My Lan and the defendants constitute the crime of "Embezzlement of property." The defendants committed the crime over a long period of time, while the Penal Code had fundamental changes in the handling method before and after January 1, 2018. Accordingly, the 1999 Penal Code does not stipulate the crime of "Embezzlement of property" for non-state legal entities, and SCB does not have state capital, so the crimes occurring before January 1, 2018 are handled according to the corresponding articles and clauses (Article 179) of the 1999 Penal Code. The crimes occurring after January 1, 2018 are handled according to the articles and clauses (Articles 353 and 206) of the 2015 Penal Code. This decision is to consider the principle of favoring the defendants.

According to the Trial Council, defendant Truong My Lan actively participated in charity activities, preventing and fighting COVID-19; was awarded the Third Class Labor Medal by the President and 31 certificates of merit by the Vietnam Red Cross Society and the Chairman of the Ho Chi Minh City People's Committee...

However, defendant Truong My Lan committed many particularly serious crimes; organized and carried out a series of criminal acts over a long period of time, using many sophisticated and deceitful tricks; appropriated and caused particularly large amounts of money.

In particular, Truong My Lan has 3 aggravating circumstances for her criminal liability: Committing a crime in an organized manner; committing the crime two or more times; and using sophisticated means to commit the crime. During the trial, the defendant was insincere, denied the crime, and blamed her subordinates.

Therefore, it is necessary to have a severe penalty commensurate with the defendant's behavior and consequences, eliminating the defendant from social life, meeting the requirements of crime prevention in general and economic crimes in particular.

According to the indictment, Van Thinh Phat Group Joint Stock Company (headquartered at 193-203 Tran Hung Dao, Co Giang Ward, District 1, Ho Chi Minh City) has the main business line of real estate; charter capital of 13,000 billion VND; legal representative and General Director is Truong Hue Van (granddaughter of Truong My Lan). Chairman of the Board of Directors is Truong My Lan, who owns 60% of the company's shares.

During its operations, Van Thinh Phat Group has established and built more than 1,000 enterprises including subsidiaries and member companies at home and abroad, divided into many layers. Van Thinh Phat Group plays a central role, holding shares, controlling all activities of companies in the ecosystem and usually does not directly participate in business activities.

The Van Thinh Phat ecosystem has hired and relied on hundreds of individuals to represent the companies; divided into 4 main groups with close relationships with each other, including: Group of financial institutions in Vietnam with SCB Bank, Tan Viet Securities Company, Viet Vinh Phu Finance Joint Stock Company; group of companies with business activities in hotels, restaurants, real estate; group of "ghost" companies in Vietnam; group of foreign company networks in many territories and "tax haven" countries.

Although she does not hold a position in SCB Bank, because she always holds controlling shares (from 85-91.5% of total shares of SCB Bank), Truong My Lan is the person who actually has the "power" of controlling shareholders, directing and operating absolutely all activities of this bank right from the merger of 3 private banks until the prosecution of the case. At the same time, Truong My Lan is the owner of Van Thinh Phat Group and most of the companies in the ecosystem.

From there, Truong My Lan used SCB as a financial tool, mobilizing capital from organizations and individuals. Using many methods and tricks, Lan and her accomplices carried out a series of actions including: Selecting and arranging her trusted personnel to key positions at SCB Bank; establishing a number of units under SCB Bank specializing in lending and disbursing at the request of Truong My Lan; colluding with individuals who are leaders of many related enterprises to commit crimes; colluding with many valuation companies to inflate the value of collateral assets; creating a very large number of fake loan applications to withdraw money from SCB Bank; planning to withdraw money, "cut off" the cash flow after disbursement; selling bad debts, selling deferred credit loans to reduce outstanding credit balances, reduce bad debts to conceal violations; bribing and influencing people with positions and powers in state agencies to violate their duties.

The investigation results determined that, during the period from January 1, 2012 to October 7, 2022, Truong My Lan directed the creation of 2,527 fake loan applications to disburse a total amount of VND 1,066,608 billion from SCB Bank. As of October 17, 2022, the group of defendants Lan still had 1,284 loans with an outstanding debt of VND 677,286 billion (including VND 483,971 billion in principal and VND 193,315 billion in interest and fees). The loans are all group 5 debt, with no possibility of recovery. The outstanding principal of Truong My Lan's loans accounts for 93% of the total outstanding principal of 23,042 outstanding loans at SCB Bank.

After deducting the value of the collateral, the indictment determined that defendant Truong My Lan Lan caused damage to SCB of about VND 498,000 billion. From January 1, 2012 to December 31, 2017, the defendant violated regulations on banking activities and other activities related to banking activities, causing damage of more than VND 64,000 billion, after deducting the value of the collateral for the loans. From January 1, 2018 to October 7, 2022, the defendant embezzled more than VND 304,000 billion in principal and more than VND 129,000 billion in interest arising from the principal, after deducting the value of the collateral for the loans.

The criminal acts of defendant Truong My Lan and her accomplices are the fundamental and essential cause leading to SCB Bank's complete loss of liquidity, huge credit balance that cannot be recovered, and negative equity of VND 443,769 billion.

Accused of being the mastermind, leader and controlling and operating the activities of SCB Bank, throughout the trial, defendant Truong My Lan always remained calm in answering questions raised by the Trial Panel, representatives of the Ho Chi Minh City People's Procuracy and lawyers.

Before, during and after the Procuracy proposed the death penalty, the defendant attentively took notes, showing that he clearly remembered the investment cooperation projects, the assets of his family and Van Thinh Phat Group.

However, during the 40 minutes of her final statement, defendant Truong My Lan could not control her emotions, cried and grieved for her family's situation when both her husband and nephew were temporarily detained, and the family was broken.