Trương Mỹ Lan at a recent trial in HCM City. The appeal trial of her death sentence for embezzlement will begin next month. — VNA/VNS Photo

HCM CITY — The appeal trial of Trương Mỹ Lan, chairwoman of Vạn Thịnh Phát Group who was sentenced to death for fraud of US$27 billion, is set to begin next month.

According to the HCM City People’s High Court, the appeal proceedings will take 20 days, beginning on November 4. 

The court will review Lan’s petition for a reduced sentence, along with the appeals of 46 other defendants of sentences related to criminal activities linked with private lender Saigon Commercial Bank (SCB) and the property developer Vạn Thịnh Phát.

There will be around 100 attorneys representing the defendants, with five representing Lan.

In April, Lan received a death sentence for embezzling VNĐ677 trillion ($27 billion) from SCB over a decade, which accounts for six per cent of Việt Nam’s GDP for 2023. Lan was also convicted of bribery and violations of banking regulations. 

The court determined that she was the architect of a prolonged scheme in which the bank was exploited for financial gain. 

To conceal the misconduct at SCB, Lan allegedly instructed her subordinates to bribe auditors from the State Bank of Vietnam. 

The head banking inspector, Đỗ Thị Nhàn, was reported to have accepted a bribe of $5.2 million and subsequently received a life sentence in prison.

Eighty-five additional individuals faced sentences on various charges, including bribery, abuse of power, appropriation of funds, and violations of banking laws. 

Banking crisis

Victims gather outside Ministry of Finance headquarters in Hà Nội at the end of 2023. — VNS Photo Bồ Xuân Hiệp

The troubled SCB, in which Lan holds a significant stake, has been accused of playing a pivotal role in defrauding over 36,000 victims, mostly its depositors, into purchasing counterfeit Vạn Thịnh Phát bonds.

The scam has resulted in massive financial losses of over VNĐ31 trillion for over 36,000 individuals who had invested their savings in the fraudulent bonds. 

The situation has triggered widespread outrage and unprecedented protests from the affected victims throughout the country.

While the jury has determined SCB bears responsibility for misleading its depositors into acquiring these fraudulent bonds, the court has mandated Lan is solely accountable for providing compensation for all damages incurred.

50-year-old victim Lê Thị Thu Thuỷ said she was misled by the bank and was unaware of Lan’s involvement in the fraudulent activities. 

She has called for SCB to accept full responsibility for the scam and to provide restitution to the victims.

“I approached the bank with the intention of depositing my funds into a savings account. The SCB staff assured me that the bond I was about to purchase was akin to a savings account product and was, therefore, entirely safe and guaranteed by the bank,” she told Việt Nam News.  

Following Lan’s arrest in late 2022, SCB faced a bank run, prompting intervention from the central bank to stabilise the financial system.

While the central bank has pledged to reimburse savings account holders, it has declined to offer compensation to the bond victims.

As of early April, the central bank had injected $24 billion in “special loans” into SCB, which accounts for almost one-fourth of Việt Nam’s foreign exchange reserves, according to a report by Reuters.

Despite regulatory constraints, such as the 30 per cent cap on combined foreign ownership in Vietnamese banks, the central bank is seeking assistance for SCB from the private sector, particularly from foreign investors.

The Vietnamese banking sector is currently facing escalating risks due to the sluggish real estate market. 

The punishment of Lan and the other fraudsters is part of a broader national anti-corruption campaign, which has further exacerbated the real estate crisis, impacting the economy and casting a shadow over the outlook for banks. — VNS