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Vietnamese tycoon Truong My Lan can avoid execution for orchestrating a $12bn fraud if she repays three-quarters of the misappropriated funds, a court ruled on Tuesday.
The chair of property developer Van Thinh Phat Group was sentenced to death in April after being found guilty of embezzling 304tn dong from Vietnam’s Saigon Joint Stock Commercial Bank (SCB). She was also found guilty of abuse of power and bribing government officials.
A court in Ho Chi Minh City rejected her appeal against the death sentence, citing the “particularly serious consequences” from the corruption case, the country’s largest financial fraud, according to Vietnamese state media.
But the court took note of a Vietnamese law that allows for her sentence to be commuted to life imprisonment if she can repay at least 75 per cent of the misappropriated amount while on death row.
During a hearing last month, the prosecution had asked her to return at least $11bn. They argued against reversing the death penalty, saying her actions have resulted in “unprecedented” losses.
The graft case against Lan is part of a broader corruption crackdown in Vietnam by the ruling Communist party that has resulted in hundreds of government officials being arrested and the prosecution of several business executives.
The “blazing furnace” — as the crackdown is called in Vietnam — has also led to a stark slowdown in government activity, including approvals for projects and licences, as officials fear getting caught up in the anti-corruption campaign.
The crackdown has taken place as Vietnam became a global manufacturing hub, with companies shifting factories away from China due to escalating tensions between Washington and Beijing.
Lan, 68, is the most high-profile businessperson to be prosecuted in the campaign. She can seek a review of Tuesday’s court decision or a presidential pardon.
She has denied wrongdoing, disputed the amount of money she is accused of embezzling from SCB and begged the court for leniency during the appeals process. Lan has also said the money she allegedly misappropriated from the bank was in fact spent on restructuring the bank.
“Because of this case, the dreams, hopes and physical strength of myself and dozens of people here have been affected. That was the most terrible experience for me,” she said during an appeal hearing last month, state media reported.
Lan’s lawyers have told the court that the assets confiscated from the tycoon were sufficient to compensate for the losses at SCB. They also said foreign investors have shown interest in reviving some of Lan’s major real estate projects, which could then help offset some of the losses.
However, prosecutors say it is not possible to determine the value of many of Lan’s assets.
“The losses in the case were especially large and unprecedented in history. It is unclear when these losses will be fully compensated,” they said during the appeal hearing.
Vietnamese officials said Lan embezzled billions through illegal control of SCB using fake companies to take out loans and bribe government officials. There are 85 other people who are charged in the case, including her husband, niece and central bank officials.
Government authorities have previously said SCB gave loans worth more than $44bn to Van Thinh Phat and other companies controlled by Lan between 2012 and 2022, accounting for 93 per cent of the total loans disbursed by the bank. SCB was placed under the control of the central bank control after Lan’s arrest.
Lan has also been sentenced to life imprisonment in a second trial for money laundering, fraudulent appropriation of assets through bond issuances and illegal cross-border money transfers.