Court prepares for trial in nation’s largest bond fraud

The Saigon Commercial Bank was taken over by the central bank after a bank run at the end of 2022 triggered by the arrest of major stakeholder Trương Mỹ Lan. — VNS Photo Bồ Xuân Hiệp

HCM CITY — The HCM City People’s Court has asked over 35,000 individuals who acquired fraudulent bonds linked to the Vạn Thịnh Phát scheme to confirm their personal information on its official website in preparation for an upcoming trial.

The court has requested individuals in possession of counterfeit bonds issued by four Vạn Thịnh Phát companies (An Đông, Sunny World, Quang Thuận, and Setra) to verify their personal details through the court’s official website.

They are also encouraged to remain updated on the court proceedings via the link: https://hochiminhcity.toaan.gov.vn/webcenter/portal/hochiminh/chitietchidaodieuhanh?dDocName=TAND339235.

Individuals that hold counterfeit bonds but not listed on the court’s website are advised to file a formal complaint at the court located at No.131 Nam Kỳ Khởi Nghĩa Street, District 1.

While the court has yet to disclose a specific date for the trial, it is anticipated to take place within this year.

The court will only accept applications submitted via mail and will not process submissions from individuals holding bonds not issued by the aforementioned four companies.

Of the over 35,000 victims in the case, amounting to VNĐ30 trillion (US$1.18 billion), many have yet to file complaints, hindering ongoing investigations, police said.

The scam, considered as the largest in Việt Nam by far, involves Trương Mỹ Lan, a 68-year-old woman currently on death row for embezzling funds from Saigon Commercial Bank (SCB), resulting in a staggering loss of VNĐ677 trillion ($27 billion). She has since filed an appeal against her death sentence.

Three executives from SCB, found complicit in Lan’s schemes, have received life sentences.

Eighty-one others have been sentenced to prison terms ranging from three to 20 years for asset appropriation, money laundering, and illegal transportation of currency across borders.

Between 2018 and 2020, Vạn Thịnh Phát and its affiliates conducted 25 bond issuances aimed at funding the group’s operations and addressing financial challenges faced by SCB. However, specific details surrounding the conspiracy remain undisclosed.

SCB faced a bank run in late 2022 following the arrest of Trương Mỹ Lan, who held a substantial stake in SCB and also served as the chairwoman of the Vạn Thịnh Phát group.

While the central bank has guaranteed all deposits, including certificates of deposits at SCB, it has refused to reimburse the victims of the fraudulent bonds, provoking public outcry.

Bondholders affected by the scandal have gathered outside the Ministry of Finance’s headquarters in Hà Nội, seeking accountability for Việt Nam’s largest financial scam. — VNS Photo Bồ Xuân Hiệp

Subsequently, numerous bondholders involved in the scandal have gathered outside the headquarters of the Ministry of Finance and the central bank in Hà Nội, demanding accountability for the situation.

Analysts have suggested the private lender should have been placed under central management earlier to mitigate potential risks on the banking system.

A central bank’s chief inspector has been sentenced to life imprisonment for accepting $5.2 million in bribes to conceal the lender’s precarious financial condition.

A commercial bank in Việt Nam found to face substantial losses would be taken over immediately by the central bank in order to safeguard the financial system.

Several banks have been successfully taken over by the central bank and have thrived.

Meanwhile, analysts have raised concerns over cross-ownership among commercial banks in Việt Nam, posing significant risks to the financial system.

The Government has blamed both the central bank and the Ministry of Finance for their weak management that caused the ongoing challenges within the banking and corporate bond markets. — VNS