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Truong My Lan, Chairwoman of the Board of Directors of Van Thinh Phat Group |
The Investigation Police Agency of the Ministry of Public Security has just completed the investigation and transferred the case file to the Supreme People's Procuracy to propose the prosecution of 86 defendants involved in the case at Van Thinh Phat Group, Saigon Joint Stock Commercial Bank (SCB), and related entities.
Among the accused, Truong My Lan, Chairwoman of the Board of Directors of Van Thinh Phat Group, is facing proposed charges of "Embezzlement of property," "Violating regulations on banking activities," and "Bribery."
The remaining suspects face charges including "Embezzlement of property," "Violating regulations on banking activities," "Accepting bribes," " Abusing position and power while performing official duties," "Lack of responsibility, causing serious consequences," and "Abusing trust to appropriate property."
Among those accused of the "Accepting bribes" offense, Do Thi Nhan, former Director of the Banking Supervision and Inspection Agency II, is proposed for prosecution, with allegations of receiving a sum of US$5.2 million from SCB through Vo Tan Hoang Van (CEO of SCB).
During the first inspection at SCB, Do Thi Nhan instructed her subordinates, including Nguyen Thi Phung, Deputy Head of the Inspection Delegation, and the synthesis team, to manipulate data by leaving out bad debts of nearly VND38 trillion and risk provisions of over VND18.7 trillion.
The information presented by Nhan inaccurately portrayed the wrongdoings and violations of SCB in various projects.
Do Thi Nhan is also accused of providing misleading information to the leadership of the State Bank of Vietnam on various aspects of the inspection results to create favorable conditions for SCB to continue restructuring. Consequently, the State Bank of Vietnam and the Government lacked sufficient information and documentation to address wrongdoings at SCB and prevent the criminal activities of Truong My Lan and her accomplices at this bank.
Tactics for manipulating banking operations
According to the investigation conclusion, Truong My Lan, as the Chairwoman of the Board of Directors for Van Thinh Phat Group, which encompasses multiple affiliated companies, exploited the banking activities to source capital for the business requirements of Van Thinh Phat Group and its affiliates. Truong My Lan took control of three banks by acquiring a significant portion of their shares, manipulating their operations to serve personal interests.
Accordingly, since December 2011, through the method of having individuals hold shares on her behalf, Truong My Lan has held 81.43 percent of the shares of the former Saigon Joint Stock Commercial Bank under the names of 32 shareholders, 98.74 percent of the shares of Vietnam Tin Nghia Joint Stock Commercial Bank under the names of 36 shareholders, and 80.46 percent of the shares of First Joint Stock Commercial Bank under the names of 24 shareholders.
Following the consolidation of these three banks on January 1, 2012, to form the Saigon Joint Stock Commercial Bank (SCB), Truong My Lan continued to have 73 shareholders to hold over 85 percent of SCB's shares on her behalf. Concurrently, she continued to acquire and utilize individuals as nominees to augment her ownership stake in SCB to over 91 percent by January 1, 2018.
According to the investigation agencies, as of October 2022, SCB had a charter capital of over VND15.2 trillion, with a total of more than 4,100 shareholders, recognized by the State Bank of Vietnam. Among them, Truong My Lan owns and controls 1.3 billion shares of SCB, accounting for 91.536 percent of the charter capital, facilitated by 27 legal entities and individuals acting as nominees.
With the ownership/control of the SCB shares mentioned above, Truong My Lan appointed or utilized individuals she trusted. These individuals, all well-qualified and with extensive experience in the financial and banking sectors, were placed in crucial positions at SCB to follow her guidance. They were compensated with salaries ranging from VND200-500 million per month for roles such as the Board of Directors, Executive Board, Directors of major branches, and Head of the Board of Supervisors. In reality, all key leaders at SCB were handpicked and given responsibilities by Truong My Lan to run the entirety of SCB's operations.
By acquiring, holding controlling shares, and directing the bank's operations via key figures at SCB, Truong My Lan utilized SCB bank with the functions of a joint-stock commercial bank as a financial instrument to attract deposits from people and organizations and mobilize capital from sources that are different from the regulations of the Credit Institutions Law.
However, in its lending operations, SCB predominantly catered to the personal interests of Truong My Lan.
The investigation agency accuses Truong My Lan's behaviors of violating Clause 1, Article 7, Clause 2, and Article 55 of the Law on Credit Institutions 2010, amended and supplemented in 2017. The actions of the individuals at SCB have contravened the provisions outlined in Article 38 of the Law on Credit Institutions 2010, amended and supplemented in 2017.
State of SCB after being manipulated
According to the Investigation Police Agency of the Ministry of Public Security, from January 1, 2012, to October 7, 2022, SCB provided loans and disbursed funds to 1,366 customers. Among these, 2,527 loans were related to the responsibilities of Truong My Lan and her accomplices, amounting to a total of VND1 trillion. As of October 17, 2022, there are still 875 customers with 1,284 outstanding loans, comprising 512 loans for individual customers and 772 loans for organizational customers, with a remaining debt of over VND677 billion. This includes over VND483 billion in principal and over VND193 billion in interest. All these loans fall into the Group 5 debt category with no potential for recovery.
From January 1, 2018, to October 7, 2022, SCB disbursed funds to 571 customers associated with Truong My Lan's group, comprising 188 individual customers and 383 organizational customers. This involved a total of 916 loans, including 208 loans for individual customers and 708 loans for organizational customers.
As of October 17, 2022, the remaining total debt was VND545 billion, consisting of VND415 billion in principal and VND129 billion in interest.
The investigation findings on the outstanding debt of over VND483 billion for 875 customers at SCB as of October 17, 2022, provide sufficient grounds for the following conclusion: After taking control of SCB, in order to withdraw money from this bank for personal financial purposes, Truong My Lan utilized trusted individuals in pivotal roles at SCB, including Vo Tan Hoang Van, Nguyen Phuong Hong, Truong Khanh Hoang, and Tran Thi My Dung, alongside key figures at Van Thinh Phat Group, including Ho Buu Phuong and Nguyen Phuong Anh.
They orchestrated the withdrawal of funds from SCB, disguising it as disbursements for legitimized loan applications (fraudulent loans). Notably, there were instances of funds being withdrawn even before the completion of the loan applications. Each withdrawal, at various stages, involved distinct approaches and was delegated to specific groups within Van Thinh Phat to establish phantom companies, draw up investment plans for different projects, and assign departments to calculate collateral assets accordingly.
During the disbursement of the VND483 billion, the Investigation Police Agency of the Ministry of Public Security concluded that Truong My Lan and her accomplices were involved in the embezzlement of property and violations of regulations related to banking activities. Investigative documents reveal that the majority of this amount was disbursed through three units under the headquarters, namely the Wholesale Customer Business Center, the direct business channel for corporate customers, and the hub for real estate loans in Ho Chi Minh City 2. Additionally, three major branches, namely SCB Saigon Branch, SCB Cong Quynh Branch, and SCB Ben Thanh Branch were units/branches compliant with the directives of Truong My Lan and her accomplices.
