Vietnamese real estate tycoon sentenced to death in landmark fraud case, Hong Kong husband pleads for leniency

Eric Chu. Insert picture: Truong My Lan.

12th April 2024 – (Hanoi) Truong My Lan, a prominent Vietnamese real estate tycoon, was sentenced to death on Thursday. This verdict comes as a result of the country’s largest-ever financial fraud case, where Lan was charged with fraud amounting to $12.5 billion, nearly 3% of Vietnam’s 2022 GDP. While death sentences are not uncommon in Vietnam, it is rare for such a punishment to be handed down in a financial crime case, let alone to someone as well-known as Lan.

Truong My Lan, born in 1956, ventured into the business world by assisting her mother, a Chinese businesswoman, in selling cosmetics at Ho Chi Minh City’s oldest market. Lan and her family established the Van Thinh Phat (VTP) company in 1992, capitalising on Vietnam’s transition to a more market-oriented economy. Over the years, VTP grew into one of Vietnam’s wealthiest real estate firms, with significant holdings in prestigious properties such as the Times Square Saigon, Windsor Plaza Hotel, Capital Place office building, and Sherwood Residence hotel, where Lan resided until her arrest. She married Hong Kong investor Eric Chu Nap-kee in 1992, and they have two daughters.

Lan’s alleged involvement in the 2011 merger of Saigon Joint Commercial Bank, along with two other lenders under the coordination of Vietnam’s central bank, forms the crux of the charges against her. She stands accused of using the bank as her personal cash cow, illegally controlling it from 2012 to 2022. Government documents reveal that Lan employed thousands of “ghost companies” both in Vietnam and abroad to secure loans for herself and her allies. The illicit loans resulted in losses of $27 billion, as reported by state media outlet VN Express. Lan faced additional charges of bribery, including payments to a former central official who received a life sentence for accepting $5.2 million in bribes, and violations of banking regulations.

The court handed down the death sentence, emphasising that Lan’s actions not only violated individuals’ property management rights but also eroded public trust in the leadership of the Communist Party and the state, pushing SCB into a state of special control. This case against Lan assumes significance against the backdrop of an ongoing anti-corruption drive in Vietnam that has gained momentum since 2022.

Lan’s arrest in October 2022 marked a high-profile moment in the anti-corruption campaign. Shortly after her trial began in early March, former President Vo Van Thuong resigned following his implication in the so-called “Blazing Furnace” campaign, championed by Communist Party General Secretary Nguyen Phu Trong, the country’s most influential politician. While Lan’s arrest and the magnitude of the fraud shocked the nation, it also raised concerns about potential wrongdoing within other banks and businesses. This has dampened Vietnam’s economic outlook and left foreign investors apprehensive at a time when the country is positioning itself as an alternative business hub to neighbouring China.

In the midst of these developments, Lan’s husband, Eric Chu, has submitted documents to the court, describing the nightmare his family is currently enduring. He pleads with the court to spare Lan from the death penalty and details his desire to have been more involved in his wife’s business affairs in the past, hoping to prevent her participation in the merger involving Saigon Joint stock Commercial Bank and the other two lenders. Chu expresses remorse and cooperation with the investigation, acknowledging his guilt for leaving his wife alone in this situation.