The High People’s Court in Ho Chi Minh City will commence the trial of a major case involving the Van Thinh Phat Group (VTP Group) and the Saigon Commercial Joint Stock Bank (SCB) on March 5, in which  Truong My Lan, Chairwoman of the VTP Group (VTP Group), will face charges of embezzlement, violating lending regulations of credit institutions, and bribery.

Lan has been indicted for embezzlement and ten others have been indicted for aiding her in embezzling funds, including  Duong Tan Truoc, CEO of the Tuong Viet Company, who received a payment of VND1.5 trillion ($61 million) from Lan.

According to the findings of the investigation, Truoc knew Lan in late 2020. Around April 2021, Lan and Truong Khanh Hoang, Acting CEO of SCB, reached an agreement with Truoc regarding the transfer of the Thanh Yen project to the Tuong Viet Company for VND2.5 trillion ($102.18 million). However, Truoc didn’t have to pay the money, and only needed to submit a loan application to SCB. The sum received as debt was VND3.5 trillion ($143.18 million), in which VND2.5 trillion ($102.18 million) was from the transfer of the project and the remaining VND1 trillion ($40.83 million) was for Lan to use and be responsible for repaying SCB.

Subsequently, Truoc directed Tuong Viet Company employees to contact SCB to obtain loans by establishing the Thuan Tien Company and Khanh Minh Company as the loan applicants. On May 19, 2021, SCB officially agreed to lend to the two newly-established companies at total of VND1.7 trillion ($69.41 million) and VND1.8 trillion ($73.5 million), respectively. The collateral for these loans was the Thanh Yen project, on 7,092 sq m in District 2, Ho Chi Minh City.

After disbursing the funds, the investigation found that the money was transferred to the accounts of various individuals and companies affiliated with Lan and the VTP Group for various purposes.

As of October 17, 2022, the outstanding principal on these loans was VND3.5 trillion ($142.9 million), with interest exceeding VND589 billion ($24.08 million)

Furthermore, Truoc assisted Lan in obtaining permits for Phase 1 of infrastructure construction at the Mui Den Do project, raising the construction coefficient for the project, and obtaining permits for a major project in Thu Duc city, Ho Chi Minh City. Truoc facilitated the Tuong Viet Company’s loan application for VND 1.5 trillion ($61 million), which essentially withdrew money from SCB for Truoc’s use.

The Mui Den Do project, also known as the Saigon Peninsula New Urban Area, is a prominent project located at the Saigon River junction in District 7, Ho Chi Minh City, with registered capital of up to $6 billion, but it is still pending.

With substantial rewards, Truoc reported to Cao Viet Dung, former Chairman of the Tuong Viet Company, about the company’s transition to a line of credit for business activities at SCB to serve production and business activities. Though the Tuong Viet Company had no business plans at this time, had no need for loans, and had no collateral for loans, Dung agreed with Truoc to establish a line of credit.

Dung did not sign the agreements for each loan disbursement, nor did he sign debt papers. He agreed to allow Truoc to forge his signature to borrow money from SCB. To legitimize the loan application, Lan instructed the transfer of 39 million shares of the Saigon Co.op Investment Development Joint Stock Company (SCID) as collateral. Subsequently, real estate assets were exchanged, including the right to use 342.8 sq m of land at 11-21 Ham Nghi Street in District 1, Ho Chi Minh City, among others.

According to the investigation, through the Tuong Viet Company, the defendants withdrew VND1.74 trillion ($71.37 million) from SCB. Among them, Lan used VND240 billion ($9.79 million), Truoc used VND1.36 trillion ($55.48 million), and the Tuong Viet Company used VND138 billion ($5.63 million) for business activities.

Thus, Truoc aided and abetted Lan in embezzling VND4.74 trillion ($192.87 million), causing losses of over VND605 billion ($24.73 million) in principal and interest. In addition, Truoc received VND2.69 trillion ($110.03 million) from  Lan, of which he returned VND492.5 billion ($20.13 million). Truoc has voluntarily pledged to return the remaining VND2.20 trillion ($89.9 million) to  Lan, to mitigate the consequences.