The series of methods used by Truong My Lan and her accomplices to 'manipulate' SCB.

In the case involving Van Thinh Phat Group Joint Stock Company, An Dong Investment Group Joint Stock Company, Saigon Commercial Bank (SCB), and related entities, the actions of Truong My Lan (born in 1956, Chairwoman of the Board of Directors of Van Thinh Phat Group) and her accomplices are considered to have involved many sophisticated criminal tactics and methods.

Through various criminal methods, Lan and her accomplices caused chaos and disruption at SCB, aiming to seize control of all of the bank's operations.

Truong My Lan (born in 1956, Chairwoman of the Board of Directors of Van Thinh Phat Group) and her accomplices are considered to have employed many sophisticated criminal tactics and methods.

To take over, control, and manage all operations of SCB.

According to the indictment of the Supreme People's Procuratorate , Truong My Lan is the Chairwoman of Van Thinh Phat Group, which comprises a collection of subsidiaries and affiliated companies.

In order to secure substantial capital to support the operations of the aforementioned company system, as well as to continuously invest in and acquire real estate projects, Truong My Lan sought to take over, control, and manage all activities of SCB Bank, including its lending operations.

Therefore, even before the merger, Truong My Lan already owned the majority of shares in the three banks. After the merger, Truong My Lan continued to have 73 shareholders hold over 85% of SCB's shares in their names, and also continued to purchase and use personal shares to increase her ownership stake in the bank to over 91% by January 1, 2018.

To gain control and direct all of SCB's operations, Truong My Lan selected and appointed trusted individuals with expertise in finance and banking to key leadership positions at SCB (Board of Directors, General Management Board, Directors of major branches, Head of the Supervisory Board), paying them high salaries ranging from 200 to 500 million VND per month; and giving them money, bonuses, and SCB shares to control all of SCB's operations through these individuals…

Using SCB as a financial tool

By acquiring, holding shares, and controlling the bank's operations through key individuals, Truong My Lan used SCB as a financial tool, mobilizing deposits and capital from other sources, and then directing the withdrawal of funds by creating fictitious loans for personal purposes.

To withdraw the money, Truong My Lan directed and instructed trusted individuals, who held key roles at SCB and Van Thinh Phat Group, to establish numerous departments, units, and companies, hiring and employing thousands of individuals who colluded closely with each other and conspired with valuation companies to withdraw the money.

Specifically, Truong My Lan established units within SCB solely for lending and disbursing funds as requested by Truong My Lan. Truong My Lan directed Dinh Van Thanh, Chairman of the Board of Directors; Vo Tan Hoang Van, General Director of SCB; and Nguyen Phuong Hong, Deputy General Director of SCB, to establish three lending units to handle loans: the Wholesale Customer Business Center, the Direct Business Channel within the Corporate Division, and the Direct Business Channel within the Personal Banking and Finance Services Division.

All three units function as branches for lending but are under the management and operation of SCB Head Office. They do not have their own treasury or seal, but use the seal of another unit in their operations and only process loan applications for Truong My Lan's loans.

Specifically, from June 3, 2020 to June 24, 2022, these three lending institutions processed and disbursed loans for 396 loans/total outstanding debt of VND 212,725 billion, of which the principal debt was VND 185,183 billion and interest/fees debt was VND 27,542 billion (accounting for 38.27% of the principal debt of Truong My Lan's loans).

Creating a network of "embezzlement" branches at SCB.

The Supreme People's Procuratorate determined that Truong My Lan directed the establishment and use of "shell" companies, hired/asked individuals to register loan applications, shares, and collateral, and formally signed withdrawal and deposit documents to create fictitious loan applications and withdraw money from SCB.

The investigation revealed that 875 customers, including 440 individuals and 435 legal entities, were listed as the owners of 1,284 loans, which were established, leased, or registered under the names of individuals working for Truong My Lan's group at Van Thinh Phat Group.

In addition to creating shell companies to register loan applications, Truong My Lan also colluded with and directed individuals who were the owners, legal representatives, or managers of actual companies engaged in business operations.

Specifically, Truong Hue Van, the niece of Truong My Lan, was entrusted with managing several companies within the Van Thinh Phat Group; Nguyen Phi Long (General Director), Dang Quang Nguyen (Deputy General Director) of Lavifood Company; Chu Nap Kee Eric (Chu Lap Co), Truong My Lan's husband, was the Chairman of Times Square Investment Joint Stock Company… to use these companies as proxies for loans or to create numerous "ghost" companies, fabricating loan applications and plans, and withdrawing money from SCB for their joint use.

Disburse funds first, legalize later.

Whenever she needed to withdraw money, Truong My Lan instructed officials at SCB and her accomplices to create fictitious loan applications and loan plans to legitimize the transactions; she had individuals hired/asked to act as nominal borrowers, owners of assets, and representatives of "ghost" companies sign the fictitious loan applications and mortgage documents, mostly on blank sheets of paper with pre-marked signature spaces.

The legal and individual representatives whose names appeared on the loan agreements did not receive or use the money, and were unaware that they had borrowed and owed SCB such a large sum; those whose names appeared on the property documents all confirmed that the assets did not belong to them.

Most of the loans of Truong My Lan - Van Thinh Phat Group were disbursed first and formalized later. The loan documents show the disbursement date coinciding with the signing of the credit agreement and mortgage agreement, but in reality, the withdrawal of funds from SCB Bank was carried out before the credit agreement and mortgage procedures were completed and formalized.

Of the 1,284 outstanding loans under Truong My Lan's responsibility, 684 loans totaling VND 382,876 billion lacked collateral upon disbursement, while the remaining loans were secured primarily by shares and property rights. Notably, 201 loans totaling VND 11,686 billion had loan applications without approval from the competent authority at SCB.

Inflating the value of collateral assets.

The Procuratorate determined that Truong My Lan colluded with a valuation company to issue certificates inflating the value of collateral assets, including them in loan applications; used collateral assets that lacked legal validity; failed to register secured transactions; and withdrew high-value assets to exchange for lower-value assets.

Specifically, in order to withdraw money from SCB through the fraudulent creation of loan applications, Truong My Lan instructed SCB officials to collude with individuals at valuation companies to issue valuation certificates to legitimize Truong My Lan's loan applications.

The investigation results determined that SCB hired 19 valuation companies/46 individuals, including directors, deputy directors, valuers, and employees, to issue 378 valuation certificates related to outstanding loans of Truong My Lan's group. To date, it has been determined that 5 valuation companies issued 23 legitimate valuation certificates for the loans of Truong My Lan's group.

To legitimize the loan applications and withdraw funds, Truong My Lan and her accomplices used many assets that lacked legal eligibility and inflated their value to use as collateral for the loans. For the 1,284 outstanding loans under Truong My Lan's responsibility, 1,166 asset codes had a book value recorded and allocated by SCB of VND 1,265,504 billion, but Hoang Quan Valuation Company could only appraise 726 out of 1,166 asset codes. The remaining assets could not be appraised because the assets, such as shares, property rights, and real estate, lacked sufficient legal documentation.

When it was necessary to withdraw legally valuable assets for sale or use for other purposes, Truong My Lan instructed her accomplices to exchange and withdraw valuable collateral assets from SCB, replacing them with other assets, most of which were of lower value than the withdrawn assets. To facilitate the exchange of collateral assets, Truong My Lan and her accomplices at SCB did not register the secured transactions as required by regulations, or disguised them as "Property Rights" to avoid registration.

Cut off cash flow, sell bad debts.

To legitimize the withdrawal of funds disbursed by SCB under a fictitious scheme, to cut off and conceal the flow of money, and to avoid detection and prosecution by authorities, Truong My Lan instructed her subordinates to create a plan to "disburse funds" by creating fictitious share transfer agreements to use the money without being inspected or prosecuted by authorities, while also avoiding paying taxes as required by law; at the same time, she had hired individuals act as beneficiaries of the loans and shareholders... to sign documents at the bank to withdraw and deposit money.

When the loans became overdue and had to be classified as Group 5 bad debts, while credit growth was restricted by the State Bank of Vietnam's regulations, Truong My Lan not only failed to repay the debts but also directed her accomplices to sell the bad debts to the Vietnam Asset Management Company (VAMC) and sell the deferred payment debts to "shell" companies established by the Van Thinh Phat group to conceal a portion of the bad debts, avoid accounting for interest, and reduce the outstanding credit balance in order to continue misappropriating money from SCB. The investigation determined that: Between January 1, 2012, and October 7, 2022, Truong My Lan and her accomplices directed individuals at SCB to sell bad debts to VAMC, sell deferred payment credit, and offset debts for 269 loans from 216 customers.

Covering up wrongdoing

In order to conceal criminal activities during inspections and audits, Truong My Lan instructed key officials of SCB to bribe officials and leaders of the Banking Supervision and Inspection Agency, leaders of the State Bank of Vietnam's Ho Chi Minh City Branch, and the head of the enhanced supervision team at SCB so that these authorized individuals would cover up and conceal information about violations, and report the inspection and audit results dishonestly and incompletely.

Furthermore, Truong My Lan instructed key leaders of SCB to reallocate her loans from several main branches (Saigon, Cong Quynh, Pham Ngoc Thach, Ben Thanh) to other branches (Dong Saigon, Cu Chi, Tan Dinh, etc.) to reduce the attention of law enforcement agencies.

Specifically, during the period of 2017-2018, the inter-agency inspection team focused its inspection on the SCB Pham Ngoc Thach branch due to the discovery of irregularities. To conceal and evade detection, Truong My Lan directed the settlement of loans at this branch by creating new loans at other SCB branches, using the disbursed funds to settle the loans at the Pham Ngoc Thach branch.

The Supreme People's Procuratorate concluded that, in this case, Truong My Lan had acquired and held in practice an almost absolute majority of shares in SCB Bank (from 85% to 91.5% of the shares), thereby becoming a shareholder with "power" to direct and manage, essentially manipulating all operations to serve her own purposes.

(Source: News Report)

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