Police said those caught in the scam were Standard Chartered bond holders who were unable to withdraw their funds. (document)
Hanoi, Vietnam:
Retired nurse Nga put her life savings into bonds at Vietnam’s SCB Bank but is now unable to withdraw her money after being caught up in a multi-billion dollar scam that shocked the country.
Now real estate tycoon Zhang Meilan is facing trial in the country’s largest-ever fraud case, with investigators accusing him of embezzling $12.5 billion after his arrest in a nationwide anti-corruption operation. Analysts say this has hit the economy and unsettled foreign investors.
Lan, chairman of major developer Van Thinh Phat, allegedly swindled cash from Saigon Commercial Bank (SCB) for years, costing unsuspecting investors and leading hundreds to stage rare protests in Hanoi and Ho Chi Minh City .
Nga (a pseudonym has been used to protect his identity) is one of 42,000 victims identified by police as victims of the Van Thinh Phat scandal.
Showing AFP bond certificates worth about $120,000 issued by Standard Chartered Bank, the 67-year-old Hanoi resident said: “My children urged me to spend money to travel, but I didn’t. I put my life savings in It’s all put there.”
“I plan to use the money to maintain our house … and help my children.”
Police said those caught in the scam were all Standard Chartered bond holders and had been unable to withdraw their funds and had not received interest or principal since Lan was arrested in October 2022.
Lan, whose husband is a wealthy Hong Kong businessman, is accused of setting up false loan applications to withdraw funds from the bank in which she owns 90% of Standard Chartered Bank.
Between February 2019 and September 2022, her drivers transported the equivalent of more than $4.4 billion in cash from the Standard Chartered Bank headquarters in Ho Chi Minh City to her nearby home and the headquarters in Van Thinh Phat.
The asset misappropriation she alleged is equivalent to about 3% of Vietnam’s 2022 GDP.
“tip of the iceberg”
Linh Nguyen, chief analyst at Vietnam Control Risk Consulting, said that despite a high-profile wave of arrests as part of the anti-corruption campaign, the scale of the scandal shocked the country.
“The question now arises: Are there other cases of similar scale?” she told AFP.
“If a businesswoman with one company and one bank can leverage such a huge amount of capital out of the economy, what about other banks and other companies?”
Banking expert Pei Jiancheng also warned that the scandal may be “just the tip of the iceberg.”
“It seems to me … that many other banks are doing the same thing, albeit perhaps to a lesser extent,” he said.
Another 85 people will stand trial alongside Lan, including former central bank governors, former Standard Chartered Bank executives and former government officials.
They include a former employee of the State Bank of Vietnam (the central bank), who is accused of accepting $5.2 million in bribes to conceal SCB’s irregularities and poor financial condition.
Other top business leaders targeted by the anti-corruption drive and accused of large-scale fraud include Truong Quy Thanh, the head of soft drinks giant Tan Hiep Phat Group.
He and his two daughters were indicted for allegedly embezzling $31.5 million.
Do Anh Dung, chairman of developer Tan Hoang Minh Group, also faces trial for illegally taking $355 million from the sale of bonds to more than 6,500 investors.
Economic impact
Luc Can, chief economist at state-owned bank BIDV, said at a recent panel discussion that the anti-corruption campaign has even hit Vietnam’s economy.
He said the government paid only 65% of its annual public investment target last year.
Day-to-day transactions within businesses and state institutions have slowed as many fear a hit.
Economic growth in 2023 was slightly above 5%, falling short of the government’s 6.5% target.
Meanwhile, the price of gold, a safe haven in times of turmoil and uncertainty, hit a record high in the country last month, surpassing global prices by a third.
Control Risks’ Linh said the trend showed that ordinary Vietnamese believed it was “safer to keep their money in gold bars under their pillows or in a safe at home”.
She added that some foreign investors were also spooked, although they generally praised what they saw as the movement’s goal of improving the rule of law.
“This does not mean (foreign investors) will flee or transfer their interests to other countries,” Lin said.
“It could just be that they’re stalling… until things settle down.”
Justice cannot come soon enough for Nga, who has opened a police case.
“Those who commit these crimes must be punished as they deserve,” she said.
“I believe and hope I can get my money back because I didn’t do anything bad to anyone.”
(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)
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