Truong My Lan, founder and chairwoman of property developer Van Thinh Phat Holdings Group, has been accused of orchestrating Saigon Joint Stock Commercial Bank’s (SCB) operations to withdraw over VND1,066 trillion (US$43.8 billion) from the bank between 2012 and 2022.

According to the Vietnamese Ministry of Public Security, Lan held no post at the bank but assumed absolute power to manipulate and control its operations.

She used the money deposited by other individuals and businesses at the bank for her expenses.

Police said that before 2011, Lan started using other people’s names to acquire 80-98 percent of the shares in three joint-stock commercial banks with the aim of establishing a bank which would fund the Van Thinh Phat ecosystem.

In January 2011, the three banks merged into SCB with the initial charter capital of over VND10 trillion ($411.9 million). SCB has a head office, 50 branches, and 184 transaction points nationwide.

Lan arranged for her family members and those with experience in finance and banking that she trusted to hold senior positions at the bank. They followed Lan’s directions and were paid VND200-500 million ($8,222-20,600) per month as wages.

According to the police’s conclusion, Lan directed SCB general directors and deputy general directors over tenures to disburse loans.

Once they faced difficulties in paying due loans, they would inform Lan.

Lan later borrowed her friends’ assets or projects and mortgaged them as collateral for loans, which were used to pay previous loans.

Most of these assets and projects were not enough to secure loans but they were gouged through appraisal.

Whenever Lan needed money, she asked senior leaders of SCB to gather at the Times Square building in District 1, Ho Chi Minh City, not the SCB headquarters, to work out solutions for taking out loans.

Former SCB leaders said they knew Lan’s acts were illegal but still obeyed her directions.

One of them, former SCB chairman Bui Anh Dung declared that Van Thinh Phat’s loan applications were signaled with ‘HSTT’ symbol so that the bank approved the credit without applying its lending process.

The loans were offered without appraising mortgaged assets, payment schedules, and customers’ background, police officers said.

Dung, while serving as SCB chairman, signed hundreds of decisions approving 207 loans totaling over VND203 trillion (8.4 billion) for 143 customers as of October 17 last year.

Vo Tan Hoang Van, former SCB general director, said he knew that Lan was the ‘real owner’ of the bank, so he followed all her directions to disburse loans although they were illicit.

Van said that loans offered to customers of the Van Thinh Phat ecosystem accounted for the majority of SCB’s lending.

Lan just made phone calls to Van whenever she needed money, Van noted, adding that the former used the money to pay her debts and loans at other banks, or invest in projects which went against lending plans.

Van inked thousands of statements related to the approval of 638 loans with the principal and interest amounting to VND405 trillion ($16.7 billion) for 402 customers of Van Thinh Phat.

Investigators from the Ministry of Public Security concluded that SCB disbursed 2,500 loans valued at VND1,000 trillion ($41.2 billion) to Lan and her accomplices between January 1, 2012 and October 7, 2022.

As of October 17 last year, SCB’s loans totaling over VND677 trillion ($27.8 billion) were bad debts with Lan’s credit making up 93 percent.

Lan directed the creation of 916 applications for loans at SCB, then appropriated over VND304 trillion ($12.5 billion), leading to a loss of accumulated interest of nearly VND130 trillion ($5.3 billion).

The Ministry of Public Security recommended charging Lan with bribery, violations of banking regulations, and embezzlement.

Lan was arrested in October last year for alleged fraud related to issuance and trading of bonds worth trillions of Vietnamese dong. (VND1 trillion = $41.2 million)

The ministry also proposed prosecuting 85 other people allegedly involved in the case, including Do Thi Nhan, former chief of the Inspectorate and Supervision Department II under the State Bank of Vietnam.

Nhan was accused of receiving bribes totaling $5.2 million, the largest-ever bribe received by an individual in a case in Vietnam, to cover up the wrongdoings of Lan and her accomplices.

The case also saw the highest number of victims, specifically 42,000 investors buying Van Thinh Phat bonds, and the highest embezzled amount of VND304 trillion ($12.5 billion).

Besides Nhan, all members of a team inspecting SCB took bribes, which ranged from VND100 million ($4,113) to VND8.7 billion ($357,695).