Retired nurse Nga (a pseudonym to protect her identity), one of the 42,000 victims of the Van Thinh Phat fraud scandal, during an interview with AFP in Hanoi, January 10, 2024 in Vietnam ( AFP/Nhac NGUYEN)
In Vietnam, tens of thousands of savers victims of a vast banking scandal are awaiting trial to understand how billions of dollars could have disappeared without anyone noticing.
“I wanted to use the money for the maintenance of our house, to help my children,” explains Nga, who speaks under a pseudonym for security reasons.
This retired nurse had invested her “life savings”, approximately $120,000, in bonds of the Van Thinh Phat real estate group, with the Saigon Commercial Bank (SCB).
But today, since 2022, like 42,000 other SCB client victims identified by the police, this 57-year-old woman no longer has access to her savings.
Retired nurse Nga, one of the 42,000 victims of the Van Thinh Phat fraud scandal, shows her bond certificates during an interview with AFP in Hanoi, on January 10, 2024 in Vietnam (AFP/ Nhac NGUYEN)
“I didn’t hurt anyone,” explains this resident of the capital Hanoi (north).
“Those who committed these crimes must be duly punished,” continues this victim who hopes to recover his money after the trial, expected in March.
Hundreds of aggrieved people took part in demonstrations in Hanoi and Ho Chi Minh City (south), in a rare expression of collective anger authorized in the authoritarian country.
– Gold Rush –
The scandal combines small arrangements and cover-ups, against a backdrop of an anti-corruption purge initiated by the communist regime which has ostracized several stars of the business world, even if it means worrying foreign investors.
A security guard in front of the offices of the Van Thinh Phat group in Ho Chi Minh City, December 7, 2023 in Vietnam (AFP/Nhac NGUYEN)
The president of Van Thinh Phat, Truong My Lan, is accused of having embezzled more than 304,000 billion dong (12.5 billion dollars) between 2018 and 2022. The sum scandalized the Vietnamese: it is equivalent to 3% of the product gross interior of the country in 2022.
The 67-year-old businesswoman owns 90% of SCB’s shares, which would have facilitated her fundraising through a system of fraudulent loans.
Between February 2019 and September 2022, his driver transported in cash some 108,000 billion dong (4.3 billion dollars) as well as 14.7 million dollars in greenbacks, between the SCB headquarters in Ho Chi Minh City and his neighboring home, according to police.
Due to a lack of transparency and effective regulation, the Vietnamese banking system leaves the door open to powerful private players.
Ms. Truong’s trial is expected to begin in March. Some 85 other people are expected to take the stand, including a former manager of the national bank accused of having accepted $5.2 million to hide management discrepancies.
A tower under construction belonging to the Van Thinh Phat group in Ho Chi Minh City, December 7, 2023 in Vietnam (AFP/Nhac NGUYEN)
Since the arrest in October 2022 of the former leader, SCB clients who purchased a Van Thinh Phat bond cannot withdraw their money, nor receive interest on their deposits.
“Now the question is: are there other similar cases in the country?” asks Linh Nguyen, analyst at the Control Risks consulting firm.
The affair shook the confidence placed in banking institutions, and pushed the Vietnamese to invest in gold, a safe haven par excellence, which reached a peak last December on a national scale.
People think that “it’s safer to keep your money under your pillow or gold bars in safes at home,” the analyst continues.
– Impact on the economy –
The Van Thinh Phat scandal could well be “only the tip of the iceberg”, warns Bui Kien Thanh, banking expert.
“I think many, many other banks are doing the same thing, but perhaps in smaller quantities,” he believes.
A security guard in front of the headquarters of the Saigon Commercial Bank (SCB), on December 7, 2023 in Ho Chi Minh City, Vietnam (AFP/Nhac NGUYEN)
In the name of the fight against corruption, the Vietnamese authorities have caught several business leaders in their nets, accused of fraud involving tens of millions of dollars.
The campaign had a negative impact on economic performance, recognizes Luc Can, economist at one of the main Vietnamese banks (BIDV).
The government did not achieve its public investment target in 2023, which was only 65% met, he underlined during a panel.
The purge is motivated to strengthen the rule of law, according to the authorities. But experts underline the political dimension of this action aimed at strengthening the authority of the Communist Party around its current leaders.
© 2024 AFP
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