Vietnam is in the midst of the largest corruption scandal till date as government officials arrested a prominent real estate developer accused of embezzling nearly $12.4 billion.
Since 2016, the governing party in the country — the Communist Party — has been on an anti-corruption campaign in which a large number of graft cases have been reported in which senior government ministers and officials have been forced to resign.
In November last year, the ministry of public security, which looks into crime prevention alleged that Truong My Lan, the chairperson of real estate developer Van Thinh Phat Holdings Group, had embezzled $12.4 billion from Saigon Commercial Bank.
According to the government, My Lan operated a network of over 1,000 domestic and foreign subsidiaries along with shell companies that took $43 billion in loans from the bank. A third of these loans went to ghost companies which she and her family created.
The government officials probing the case recommended the prosecution of 85 people, including 24 government officials and associates of Van Thinh Phat Holdings Group and Saigon Commercial Bank.
In a separate investigation, the Communist Party’s Central Committee also asked for opening investigations into another 23 state officials, including 12 from the country’s central bank.
Truong My Lan now awaits a trial that starts on March 5 and if found guilty would be sentenced to death or lifetime in prison.
This could be the largest corruption scandal in Southeast Asian history, easily surpassing the scandal in Malaysia where $4.45 billion were stolen from the country’s sovereign wealth fund.
The latest scandal has started affecting the business confidence of private companies as a host of companies were investigated for corruption allegations last year. In recent years, Vietnam has become one of the biggest economic success stories in Asia. Foreign direct investment rose to over $23 billion in 2023, up 3.5% from the previous year.
But the country is struggling to keep up with the rapid pace of change with corruptioon being a major issue as the economy has grown.
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