Construction of a building near Bến Thành Market, believed to be owned by Viva Land, a subsidiary of Vạn Thịnh Phát Group, stalled at the end of 2022 following the arrest of Trương Mỹ Lan. — VNS Photo Bồ Xuân Hiệp

HCM CITY — HCM City authorities have announced a compensation plan for tens of thousands of bondholders who were misled into purchasing bonds through a private lender in a case considered Việt Nam’s worst financial fraud.

The HCM City Department of Civil Judgment Enforcement has provisionally seized over VNĐ8 trillion (US$315 million) earmarked for compensating the victims of the Vạn Thịnh Phát-SCB (Saigon Commercial Bank) scandal.

The department is actively overseeing the management of these assets to facilitate the recovery of funds as stipulated in the initial judicial ruling.

Until the second phase of the appeal judgment is active, which is expected next month, the department will prioritise the disbursement of the seized funds and any amounts that may be recovered to the nearly 42,000 bondholders affected by this incident.

To assist bondholders in understanding their rights, the department has established a 24-hour hotline at 1900 599802.

It is collaborating with Tân Việt Securities Company (TVSI) to provide guidance to bondholders regarding the required documentation for compensation, which includes proof of identity and bank account details.

Earlier, Vietnamese authorities assured that any funds recovered from the bond scandal would be returned to the affected bondholders who were misled into acquiring bonds from SCB.

The police have expressed their commitment to ensuring that victims receive restitution for their losses.

Trương Mỹ Lan, 68, former chairwoman of Vạn Thịnh Phát and a prominent real estate developer in Việt Nam, was sentenced to life imprisonment last year for fraud and property appropriation.

Investigations revealed her network of over 1,000 fictitious companies issued fraudulent bonds amounting to VNĐ30 trillion ($1.24 billion), impacting more than 42,000 victims, mostly SCB depositors.

Since her arrest in October 2022, the victims have not received any payment.

While the Central bank has assured the public that savings accounts remain secure, it has clarified that bonds issued by the lender were not guaranteed, triggering unprecedented protests among the victims across the nation.

In a separate trial last year, Lan was sentenced to death for bribery, violating banking regulations, and embezzlement. She was also ordered to pay compensation of VNĐ673.8 trillion ($27 billion) to SCB. The court has mandated that Lan compensate the full amount embezzled.

Authorities have seized assets valued in the millions of US dollars linked to Lan, which include properties, shares, and vehicles.

Additionally, multiple accounts holding millions of US dollars and various funds have been frozen, all of which will be prioritised for repayment to the bond victims.

Despite being sentenced to death, under Vietnamese law, she may evade execution by returning 75 per cent of the embezzled assets and cooperating with authorities.

Lan's arrest was part of an anti-corruption campaign in Việt Nam that has intensified since 2021.

In 1992, Lan and her family founded Vạn Thịnh Phát, which was one of the country's most prominent real estate companies.

The company operates in commerce, hospitality, and real estate, owning significant properties in prime locations, primarily in HCM City.

They include the 39-story Times Square Saigon, Windsor Plaza Hotel, and the Sherwood Residence hotel, where Lan was residing before her arrest. — VNS

Bondholders who were deceived into purchasing bonds through private bank SCB gather in front of the Ministry of Finance office in Hà Nội at the end of 2023 to demand a resolution to the scandal. — VNS Photo Bồ Xuân Hiệp