Vietnamese billionaire sentenced to death for $44 billion fraud

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Written by Super User

Category: Asia

Published: 11 April 2024

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By Jonathan Head & Thu Bui

Ho Chi Minh City - It was the most spectacular trial ever held in Vietnam, befitting one of the greatest bank frauds the world has ever seen.

Behind the stately yellow portico of the colonial-era courthouse in Ho Chi Minh City, a 67-year-old Vietnamese property developer was sentenced to death on Thursday for looting one of the country's largest banks over a period of 11 years.

It's a rare verdict - she is one of very few women in Vietnam to be sentenced to death for a white collar crime.

The decision is a reflection of the dizzying scale of the fraud. Truong My Lan was convicted of taking out $44 billion (£35bn) in loans from the Saigon Commercial Bank. The verdict requires her to return $27 billion, a sum prosecutors said may never be recovered. Some believe the death penalty is the court's way of trying to encourage her to return some of the missing billions.

The habitually secretive communist authorities were uncharacteristically forthright about this case, going into minute detail for the media. They said 2,700 people were summoned to testify, while 10 state prosecutors and around 200 lawyers were involved.

The evidence was in 104 boxes weighing a total of six tonnes. Eighty-five others were tried with Truong My Lan, who denied the charges and can appeal.

All of the defendants were found guilty. Four received life in jail. The rest were given prison terms ranging from 20 years to three years suspended. Truong My Lan's husband and niece received jail terms of nine and 17 years respectively.

"There has never been a show trial like this, I think, in the communist era," says David Brown, a retired US state department official with long experience in Vietnam. "There has certainly been nothing on this scale."

The trial was the most dramatic chapter so far in the "Blazing Furnaces" anti-corruption campaign led by the Communist Party Secretary-General, Nguyen Phu Trong.

A conservative ideologue steeped in Marxist theory, Nguyen Phu Trong believes that popular anger over untamed corruption poses an existential threat to the Communist Party's monopoly on power. He began the campaign in earnest in 2016 after out-manoeuvring the then pro-business prime minister to retain the top job in the party.

The campaign has seen two presidents and two deputy prime ministers forced to resign, and hundreds of officials disciplined or jailed. Now one of the country's richest women has joined their ranks.

Truong My Lan comes from a Sino-Vietnamese family in Ho Chi Minh City, formerly Saigon. It has long been the commercial engine of the Vietnamese economy, dating well back to its days as the anti-communist capital of South Vietnam, with a large, ethnic Chinese community.

She started as a market stall vendor, selling cosmetics with her mother, but began buying land and property after the Communist Party ushered in a period of economic reform, known as Doi Moi, in 1986. By the 1990s, she owned a large portfolio of hotels and restaurants.

Although Vietnam is best known outside the country for its fast-growing manufacturing sector, as an alternative supply chain to China, most wealthy Vietnamese made their money developing and speculating in property.

All land is officially state-owned. Getting access to it often relies on personal relationships with state officials. Corruption escalated as the economy grew, and became endemic.

By 2011, Truong My Lan was a well-known business figure in Ho Chi Minh City, and she was allowed to arrange the merger of three smaller, cash-strapped banks into a larger entity: Saigon Commercial Bank.

Vietnamese law prohibits any individual from holding more than 5% of the shares in any bank. But prosecutors say that through hundreds of shell companies and people acting as her proxies, Truong My Lan actually owned more than 90% of Saigon Commercial.

They accused her of using that power to appoint her own people as managers, and then ordering them to approve hundreds of loans to the network of shell companies she controlled.

The amounts taken out are staggering. Her loans made up 93% of all the bank's lending.

According to prosecutors, over a period of three years from February 2019, she ordered her driver to withdraw 108 trillion Vietnamese dong, more than $4bn (£2.3bn) in cash from the bank, and store it in her basement.

That much cash, even if all of it was in Vietnam's largest denomination banknotes, would weigh two tonnes.

She was also accused of bribing generously to ensure her loans were never scrutinised. A former chief inspector at the central bank was given a life sentence for accepting a $5m bribe.

The mass of officially sanctioned publicity about the case channelled public anger over corruption against Truong My Lan, whose fatigued, unmade-up appearance in court was in stark contrast to the glamorous publicity photos people had seen of her in the past.

But questions are also being asked about why she was able to keep on with the alleged fraud for so long.

"I am puzzled," says Le Hong Hiep who runs the Vietnam Studies Programme at the ISEAS - Yusof Ishak Institute in Singapore.

"Because it wasn't a secret. It was well known in the market that Truong My Lan and her Van Thinh Phat group were using SCB as their own piggy bank to fund the mass acquisition of real estate in the most prime locations.

"It was obvious that she had to get the money from somewhere. But then it is such a common practice. SCB is not the only bank that is used like this. So perhaps the government lost sight because there are so many similar cases in the market."

David Brown believes she was protected by powerful figures who have dominated business and politics in Ho Chi Minh City for decades. And he sees a bigger factor in play in the way this trial is being run: a bid to reassert the authority of the Communist Party over the free-wheeling business culture of the south.

"What Nguyen Phu Trong and his allies in the party are trying to do is to regain control of Saigon, or at least stop it from slipping away.

"Up until 2016 the party in Hanoi pretty much let this Sino-Vietnamese mafia run the place. They would make all the right noises that local communist leaders are supposed to make, but at the same time they were milking the city for a substantial cut of the money that was being made down there."

At 79 years old, party chief Nguyen Phu Trong is in shaky health, and will almost certainly have to retire at the next Communist Party Congress in 2026, when new leaders will be chosen.

He has been one of the longest-serving and most consequential secretary-generals, restoring the authority of the party's conservative wing to a level not seen since the reforms of the 1980s. He clearly does not want to risk permitting enough openness to undermine the party's hold on political power.

But he is trapped in a contradiction. Under his leadership the party has set an ambitious goal of reaching rich country status by 2045, with a technology and knowledge-based economy. This is what is driving the ever-closer partnership with the United States.

Yet faster growth in Vietnam almost inevitably means more corruption. Fight corruption too much, and you risk extinguishing a lot of economic activity. Already there are complaints that bureaucracy has slowed down, as officials shy away from decisions which might implicate them in a corruption case.

"That's the paradox," says Le Hong Hiep. "Their growth model has been reliant on corrupt practices for so long. Corruption has been the grease that that kept the machinery working. If they stop the grease, things may not work any more."

Strongest earthquake in 25 years rocks Taiwan, killing 9 people

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Written by Super User

Category: Asia

Published: 03 April 2024

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By CHRISTOPHER BODEEN and JOHNSON LAI

HUALIEN, Taiwan — The strongest earthquake in a quarter-century rocked Taiwan during the morning rush hour Wednesday, killing nine people, sending others scrambling out the windows of damaged buildings and halting train service throughout the island. A tsunami warning was triggered but later lifted.

The quake, which also injured hundreds, was centered off the coast of rural, mountainous Hualien County, where some buildings leaned at severe angles, their ground floors crushed. Just over 150 kilometers (93 miles) away in the capital of Taipei, tiles fell from older buildings, and schools evacuated their students to sports fields, equipping them with yellow safety helmets. Some children covered themselves with textbooks to guard against falling objects as aftershocks continued.

Television images showed neighbors and rescue workers lifting residents, including a toddler, through windows and onto the street, after doors fused shut in the shaking. All appeared mobile, in shock but without serious injuries.

Taiwan is regularly jolted by quakes and its population is among the best prepared for them, but authorities said they had expected a relatively mild earthquake and accordingly did not send out alerts. The eventual temblor was strong enough to scare even people who are used to such shaking.

“I’ve grown accustomed to (earthquakes). But today was the first time I was scared to tears by an earthquake,” said Hsien-hsuen Keng, a resident who lives in a fifth-floor apartment in Taipei. ”I was awakened by the earthquake. I had never felt such intense shaking before.”

Nine people died in the quake, which struck just before 8 a.m., according to Taiwan’s national fire agency. The local United Daily News reported that three were hikers killed in rockslides in Taroko National Park, which is in Hualien, and that a van driver died in the same area when boulders hit the vehicle.

Another 934 people were injured. Meanwhile, authorities said they had lost contact with 50 people in minibuses in the national park after the quake downed phone networks. Another six people were trapped in a coal mine, where a rescue was underway.

The quake and aftershocks also caused 24 landslides and damage to 35 roads, bridges and tunnels.

Taiwan’s earthquake monitoring agency said the quake was 7.2 magnitude while the U.S. Geological Survey put it at 7.4. It struck about 18 kilometers (11 miles) off of Hualien, on Taiwan’s east coast, and was about 35 kilometers (21 miles) deep. Multiple aftershocks followed.

The national legislature, a converted school built before World War II, and sections of the main airport in Taoyuan, just south of Taipei, also saw minor damage.

Traffic along the east coast was at a virtual standstill after the earthquake, with landslides and falling debris hitting tunnels and highways. Train service was suspended across the island of 23 million people, with some tracks twisted by the stress of the quake, as was subway service in Taipei, where sections of a newly constructed elevated line split apart but did not collapse.

The initial panic after the earthquake quickly faded on the island, which prepares for such events with drills at schools and notices issued via public media and mobile phone. Stephen Gao, a seismologist and professor at Missouri University of Science and Technology, said Taiwan’s readiness is among the most advanced in the world, also featuring strict building codes and a world-class seismological network.

By noon, the metro station in the busy northern Taipei suburb of Beitou was again buzzing with people commuting to jobs and people arriving to visit the hot springs or travel the mountain paths at the base of an extinct volcano.

The earthquake was felt in Shanghai and several provinces along China’s southeastern coast, according to Chinese media. China and Taiwan are about 160 kilometers (100 miles) apart.

The Japan Meteorological Agency said a tsunami of 30 centimeters (about 1 foot) was detected on the coast of Yonaguni island about 15 minutes after the quake struck. Smaller waves were measured in Ishigaki and Miyako islands. All alerts in the region had been lifted by Wednesday afternoon.

Taiwan lies along the Pacific “Ring of Fire,” the line of seismic faults encircling the Pacific Ocean where most of the world’s earthquakes occur.

Hualien was last struck by a deadly quake in 2018 that killed 17 people and brought down a historic hotel. Taiwan’s worst quake in recent years struck on Sept. 21, 1999, with a magnitude of 7.7, causing 2,400 deaths, injuring around 100,000 and destroying thousands of buildings.

The economic fallout from the quake has yet to be calculated, but Taiwan is the leading manufacturer of the world’s most sophisticated computer chips and other high-technology items that are highly sensitive to seismic events. Parts of the electricity grid were shut down, possibly leading to disruptions in the supply chain and financial losses.

Taiwanese chipmaker TSMC, which supplies semiconductors to companies such as Apple, said it evacuated employees from some of its factories in Hsinchu, southwest of Taipei. Hsinchu authorities said water and electricity supplies for all the factories in the city’s science park were functioning as normal.

The Taiwan stock exchange opened as usual on Wednesday, with the index wavering between losses and gains.

China says US is giving ‘green light to slaughter’ in Gaza

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Written by northsouth

Category: Asia

Published: 22 February 2024

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NEW YORK - China has accused the US of giving a green light to “slaughter” after it vetoed a resolution calling for an immediate humanitarian pause in Gaza at the UN security council.

The resolution put forward by Algeria was vetoed by the US on Tuesday which argued it was not the “right time for a general ceasefire that leaves Hamas in control”.

In a strongly-worded response to the move, Zhang Jun, China’s UN ambassador, said: “Given the situation on the ground, the continued passive avoidance of an immediate ceasefire is nothing different from giving a green light to the continued slaughter.”

The comments represent the harshest criticism yet from China of US policy in Gaza.

Washington called the Algerian resolution, which does not link a ceasefire to the release of hostages, “wishful and irresponsible”.

However, Mr Zhang said: “The spillover of the conflict is destabilising the entire Middle East region, leading to rising risk of a wider war. Only by extinguishing the flames of war in Gaza can we prevent the fires of hell from engulfing the entire region.”

The US is preparing its own resolution to be brought before the Security Council which calls for a temporary ceasefire “as soon as practicable,” as well as lifting of restrictions on humanitarian aid and the unconditional release of all hostages.

The Biden administration has argued that it is vital to give the ongoing ceasefire negotiations between Israel and Hamas a chance, despite both parties refusing to compromise.

Israel has come under intense pressure from its allies to cancel its planned military operation in Rafah, Gaza’s southernmost city, where some 1.4 million Palestinians are sheltering.

Prince William calls for ceasefire

Prince William joined the calls for a ceasefire in Gaza on Tuesday, arguing that “too many” have been killed in the fighting between Israel and Hamas.

Eylon Levy, the Israeli government’s spokesman, responded to Prince William’s comments saying: “Israelis of course want to see an end to the fighting as soon as possible, and that will be possible once the 134 hostages are released, and once the Hamas terror army threatening to repeat the October 7 atrocities is dismantled.

“We appreciate the Prince of Wales’ call for Hamas to free the hostages. We also recall with gratitude his statement from October 11 condemning Hamas’ terror attacks and reaffirming Israel’s right of self-defence against them.”

While the UK abstained from the security council vote on Algeria’s resolution, Keir Starmer, leader of the Labour Party, has backed a lasting, permanent ceasefire which “must happen now”, he said.

Israel is refusing to accept a permanent ceasefire with Benjamin Netanyahu hellbent on achieving his goal of “total victory”, namely the complete destruction of Hamas and the release of all hostages.

Yoav Gallant, Israel’s defence minister, echoed Mr Netanyahu on Wednesday, saying: “Our goal is simple – victory. Only victory against Hamas will allow us to achieve normalisation and regional integration.”

Hamas, meanwhile, also refuses to compromise on its demands as part of a ceasefire deal which includes the full withdrawal of Israeli soldiers from Gaza and rehabilitation of the enclave.

Relatives of hostages in Israel have taken to the streets in recent weeks, with many accusing the government of abandoning its citizens in Gaza.