Van Thinh Phat chairwoman manipulates lender SCB in $44B scam

The police have identified Lan as the mastermind who controlled the bank and thousands of companies to obtain loans on demand.

So far the police have recommended charges against 86 people, including her, SCB managers and several officials in the State Bank of Vietnam.

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.

Lan began her unsavory career in 2011 by getting people she had control over to buy shares of three banks, Saigon Commercial JSC, Vietnam Tin Nghia and De Nhat in their names with her money.

On January 1, 2021, the three banks merged to form SCB.

Lan owned 91.5% of bank but had the shares registered in the names of 27 individuals. She only held 4% in her name to comply with the 5% individual ownership limit allowed for banks.

Whenever any of them moved to other geographical locations or suffered from some serious illness, she would replace them immediately to avoid future complications. They were all paid for holding the shares on her behalf.

After taking control of the bank, she appointed people she trusted in key positions in it and paid them salaries of VND200-500 million.

Though most of the managers and shareholders were Vietnamese, the police have found several foreigners also owned stakes in SCB, but Lan never revealed details about them -- and in fact only had their first names such as Simon, Thomas and Kent on record -- including nationalities.

But the police have discovered that at least five were from Japan or Singapore.

Lan had the chairman, CEO and deputy CEO of the bank reviewing credit proposals though she had the final say in everything.

The chairman, Bui Anh Dung, told the police that he merely signed loan approvals after they were disbursed to Lan and her network of companies.

Former SCB CEO Bui Anh Dung. Photo courtesy of SCB

The loan applications were marked with a unique symbol so the managers could distinguish them from normal loans.

They often had no collateral, repayment schedule or customer background check, and were approved even before they were completed, the police said.

Whenever she needed a large sum of money, Lan would hold a meeting in an outside location and not the SCB headquarters to avoid raising suspicion.

At those meetings she would tell the bank executives how much she needed, when and what kind of collateral would be shown on paper.

Sometimes she would just make a phone call to get a loan to save her the trouble of going through the normal process, a former CEO, Vo Tan Hoang Van, said.

Van himself established three new units on her directions just to serve her financial needs.

Lan would often withdraw cash running into tens of billions of Vietnamese dong (VND10 billion = $413,560).

In some cases she used the money to invest in HCMC property projects through Van Thinh Phat, including the 264,000-square-meter Sterling Residence residential hub in Binh Chanh District.

Also part of her network was husband and Hong Kong citizen Chu Nap Kee Eric, chairman of property developer Times Square Vietnam.

They jointly managed the Times Square office, hotel, apartment, and mall complex in downtown HCMC. Many of Lan’s meetings with the SCB bosses were held there. The complex was built with SCB money.

The loans given to develop Times Square caused the bank losses of nearly VND40 trillion, the police said.

Between 2012 and 2022 she borrowed over VND1 quadrillion, or 93% of the total loans SCB gave during the period. The sum was equivalent to one-fifth of Vietnam’s GDP as of the end of September.

She bribed central bank officials so that they overlooked SCB’s financial situation, which was "very bad" in 2017, the police said. This was to keep the bank in business so that it could get more deposits.

The Ministry of Public Security last week recommended that Lan be charged with a number of crimes, including bribery, embezzlement and violating banking regulations.

Eighty-five others are likely to face the same crimes in addition to "appropriation of property through abuse of trust."

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