How Van Thinh Phat chairwoman used cash as puppet strings to manipulate bankers

Lan, who faces charges of embezzlement among others, had 17 SCB bosses on her payroll during her 10 years of manipulating the bank and siphoning off money, according to the Supreme People’s Procuracy.

She recruited them herself for the bank, and paid each between VND200 million and VND500 million a month, and bonuses on top of that, and in turn they approved loans worth VND1 quadrillion for her between 2012 and 2022.

The sum of over VND1 quadrillion represents a colossal 93% of the total loans issued by SCB during this period. This amount equates to 22.6% of Vietnam’s GDP as of the end of September. It triples the investment budget of the mega Long Thanh International Airport and also seven times greater than that of the 12 high-speed expressways spanning from northern to southern Vietnam.

One of the accomplices, Bui Anh Dung, was among the earliest recruits of SCB and rose from being a branch director to chairman in 2020.

He ignored regulations to approve Lan’s loans, not insisting on appraising them and marking them separately from regular loans.

He was rewarded with 500,000 SCB shares worth VND5 billion on top of his salary and other payments. Lan owned a 91% stake in the bank, registered in the names of various accomplices, and doled shares out generously to reward bank executives.

The bank’s acting CEO Truong Khanh Hoang was another accomplice who participated in meetings called by Lan to receive her directions on how much money she needed and what kind of collateral would be used for them.

SCB acting CEO Truong Khanh Hoang. Photo courtesy of the bank

Hoang would then instruct the credit department to approve the loans. When the loans became due, he and other executives would discuss ways to make them appear as if they had been paid.

He approved 386 loans for Lan worth VND220 trillion during his time at the bank, and in return got paid VND130-500 million a month plus VND5 billion in bonuses.

Lan also gave him 10 million SCB shares (worth VND100 billion) in 2022 as a reward, and he promptly registered them in the names of family members.

Deputy CEO Tran Thi My Dung was also in on the giant scam, approving Lan’s loans, and received 300,000 SCB shares in 2021 as reward.

Five current and former SCB executives have disappeared, and prosecutors are calling on them to surrender, failing which they plan to try them in absentia.

Lan and her accomplices’ illegal withdrawals caused VND500 trillion in losses at SCB, police said. After SCB faced a run in October 2022, the central bank put the private lender under special control to limit negative impacts on it and credit institutions in general.

Assets valuation

Lan also controlled a number of valuation companies that falsified the worth of the assets she used as collateral for her loans.

One of them is MHD, which began partnering SCB in mid-2020 for the nefarious purpose.

Ho Binh Minh, deputy CEO of MHD, also partnered with another firm New Vision Valuation, which was formed in March 2022, to give valuation for assets back in 2020 and 2021 so SCB can approve loans.

Seven members of valuation companies have partnered with SCB leaders to approve the loans, causing a loss of VND127 trillion to the bank, the prosecutors said.

Lan was arrested last October for alleged fraud related to issuance and trading of bonds worth trillions of dong (VND1 trillion = $41.87 million).