CRE Exec Sentenced To Death For Fraud Scheme Amid Vietnamese Corruption Crackdown
A female executive of one of Vietnam’s richest real estate firms has been sentenced to death by a Ho Chi Minh City court after being found guilty of a multibillion-dollar fraud scheme.
In an outcome that has sent that nation's commercial real estate sector into a tailspin, Truong My Lan, the 67-year-old chair of development firm Van Thinh Phat, was convicted of embezzling $12.5B through loans to shell companies, among other charges, NBC News reported.
The fraud was so massive it equaled nearly 3% of the country’s gross domestic product. Its fallout has left other businesses worrying they, too, have fallen afoul of new Vietnamese anticorruption measures, while foreign investors contemplate pulling out of the nation altogether, NBC reported.
In addition to embezzlement charges, Lan was convicted of bribing government officials and violating bank rules. Lan was able to secure more than 2,500 loans from Saigon Commercial Bank, crimes that gave her ownership of 91.5% of the bank’s shares. Total damages caused by the scam amount to $27B, Vietnamese prosecutors said, according to MSN.
Van Thinh Phat owns and develops luxury residential buildings, offices, hotels and shopping centers. Its assets include Times Square Saigon, the Windsor Plaza Hotel in Ho Chi Minh City, and Capital Place, a more than 1M SF office complex in Downtown Hanoi, Reuters reported.
The company is among Vietnam’s most prolific developers, but it is difficult to nail down the exact value of its assets. Most are unfinished and questions around ownership remain, but estimators and appraisers believe the company’s portfolio to be valued somewhere between $12B and $48B, according to Reuters.
Lan's crimes damage Vietnam's credibility during a time when its government is attempting to steal business away from neighboring countries, NBC reported. Companies have been looking to redirect their supply chains in the wake of China's rigid pandemic-era health policies, which have had spillover effects into the Vietnamese real estate market.
But an estimated 1,300 property firms withdrew from Vietnam in 2023, per NBC. Ho Chi Minh City shophouse rents are being marketed at major discounts, and developers are slashing prices and offering gold to attract buyers, a practice that is now coming into question.
Lan’s case is part of a broader crackdown on corruption in Vietnam. She was tried alongside 85 other defendants, including former central bankers, SCB executives and government officials, according to The Guardian.
