Lan, who will be tried next week on charges of corruption, violating banking regulations and embezzlement, said she had received an offer from State Bank of Vietnam Deputy Governor Tran Minh Tuan to oversee the merger of troubled lenders Vietnam Tin Nghia. Bank, De Nhat Bank and Saigon Commercial Bank (SCB).
It had no stake in any of them, but had assets that could be loaned to SCB, as the merged entity was called, as collateral for borrowing money from the central bank, he said. she told police.
Lan joined a consultant for the merger. It purchased shares of the three banks from shareholders and allowed SCB to use its five-star Windsor hotel as collateral to borrow VND15 trillion ($608.52 million) from SBV.
She said she tried hard to revive SCB, which still had many debts at the time. She wanted to “keep her promise to the SBV”.
She said she had never placed relatives in management positions at the bank and had not wanted one for herself since she had no banking background.
SCB’s decisions were made by its leaders and she was never directly involved, she said.
Handling and control
Police, however, said there was enough evidence to conclude that Lan wanted to merge the three banks into one financial vehicle to finance his business and its subsidiaries.
From 2011, it began acquiring shares in the three banks on behalf of third parties. When the new bank was created on January 1, 2012, it held 5% on paper when in reality it owned more than 91.5%.
She had used her own money and borrowed from friends to buy the shares because she also believed that their value would increase several times over the next five years and that she could make a lot of money.
She had complete control over all companies run by Van Thinh Phat.
She appointed trusted people with financial experience to key positions within SCB and paid them between VND200 million and VND500 million per month plus bonuses.
She asked Van Thinh Phat leaders to create shell companies to borrow money from SCB. Among those in whose name the loans were granted were her husband Erik Chu Nap Kee and niece Truong Hue Van.
Lan also increased the value of collateral dozens of times or used illegitimate assets as collateral to obtain large sums from the bank.
Most of Lan and Van Thinh Phat’s loans were disbursed before even being approved on paper. Some were not even approved by authorized SCB personnel.
As of 2022, Lan and his accomplices held nearly 1,300 loans worth VND677 trillion, but they are unrecoverable, according to police.
The bank’s CEO, Vo Tan Hoang Van, told police that Lan made all decisions at SCB and was directly involved in approving loans.
Swept under the rug
Lan’s activities were indeed discovered during her 10 years of madness, but she paid bribes to cover them up.
In 2017 and 2018, SBV auditors found violations related to loans, bad debt handling and management and recommended placing it under special supervision.
Lan immediately asked the bank’s president, Dinh Van Thanh, and CEO Van to bribe the 24 members of the audit team.
The head of the investigation team, Do Thi Nhan, reportedly received $5.2 million.
In response to accusations that she manipulated the bank, she claimed that she only decided which assets would be used as collateral for Van Thinh Phat’s loans, while approval of the loans was done by SCB executives and that she had not participated in the process.
She said the matter should be investigated in depth and that she is willing to use her personal assets to cover the bank’s losses.
Besides Lan, there will be 85 others in court next week, including 45 former SCB executives, 15 SBV officials, three government inspectors and a former National Audit Office official.
They face charges of embezzlement, corruption, abuse of power in the exercise of their official duties, irresponsibility leading to serious consequences and violation of banking regulations.
As for violations in Van Thinh Phat, 108 people were charged with multiple crimes, including 23 department heads and inspectors.
Lan and 21 others are also accused of misappropriation of assets and money laundering, but prosecutors have recommended that a separate case be filed against them.
