Vietnam Tracking Down Van Thinh Phat Assets at Home and Abroad

Having earlier this month charged former Van Thinh Phat boss Truong My Lan and 85 co-defendants with embezzling VND 304 trillion ($12 billion), Vietnamese authorities now say they are tracking the company’s laundering of its ill-gotten cash through real estate acquisitions at home and overseas.

“Funds were transferred abroad for investment and we are investigating this through legal means and will announce the results of the investigation later,” Nguyen Van Thanh, deputy director of the Police Bureau for Prevention of Corruption, Economy and Smuggling said at a news conference this week, according to a statement on the Communist Party of Vietnam website.

Major General Nguyen said the Van Thinh Phat case is now moving into its second phase, focusing on Truong masterminding a money laundering scheme, after the initial effort mapped out the scope of a fraud which forced the government to take over Saigon Commercial Bank (SCB), and helped trigger a crisis in the country’s housing market.

Van Thinh Phat and its affiliates raised more than VND 30 trillion selling bonds, with the group said to have used the proceeds to buy trophy assets in Ho Chi Minh City including the Times Square mixed-use complex and the Union Square shopping mall in District 1. Truong’s husband, Hong Kong businessman Eric Chu, acquired the Nexxus building in Central district, while Van Thinh Phat-linked Viva Land bought properties on Singapore’s Robinson Road which it rushed to offload this year.

More Charges on the Way

Major General Nguyen said that Vietnamese authorities are determined to aid investors swindled by Truong and Van Thinh Phat and to recover assets on their behalf.

Vietnamese state prosecutors have said that, through her control of SCB, Truong directed 2,500 disbursements of more than VND 1 trillion by the bank to Van Thinh Phat from 2012 until her arrest late last year.

The primary focus of the Van Thinh Phat investigation’s second phase is on fraudulent appropriation of property and money laundering Ministry of Public Security officials said at the press event.

Vietnam has clear laws on money laundering, Major General Nguyen said, while underlining that Truong used both loans obtained through SCB and bond sales to acquire real estate across Vietnam and in foreign countries.

Truong’s arrest last year and the ensuing scandal helped trigger a collapse in Vietnam’s property market as investors dumped developer bonds and homebuyers kept their cash under their mattresses.

In February of this year, Vietnam’s second-largest developer by sales, Novaland said it would delay repayment of a VND 1 trillion bond due that month. Earlier this week, the company’s controlling shareholder announced that it was selling down its stake in Novaland to raise cash.

Truong and 85 co-defendants were indicted on 13 December on charges of embezzlement, violations of banking regulations, dereliction of responsibility causing grave consequences, abuse of positions of power, payment and receipt of bribes, and abuse of trust to appropriate property, according to a government statement at the time.

In the charges earlier this month, Vietnamese prosecutors accused Truong of working with accomplices in her company, private investment firm An Dong Group, at SCB and in the government, to create 916 false loan documents granting access to VND 304 trillion in funds from SCB. That misappropriation caused the lender VND 129 trillion in losses from February 2018 until the former cosmetics seller was arrested last October, the prosecutors said.

Regional Portfolio

In addition to the Times Square complex on Ho Chi Minh City’s Nguyen Hue walking street, Van Thinh Phat’s Vietnam portfolio includes Saigon Peninsula, a $6 billion project in Phu Thuan ward of District 7, the 203-room Hotel Duxton, VTP Office Building and the SJC Tower on Le Loi in District 1, among other properties.

In January of 2022 Van Thinh Phat’s Viva Land acquired the Capital Place commercial project in Hanoi from Singapore’s Capitaland for a reported $550 million.

In November, Viva Land, which has links to Truong and Van Thinh Phat, agreed to sell the Hotel Telegraph along Singapore’s Robinson Road for a price reported to be between S$170 million to S$180 million ($125 to $133 million). The sale represented a S$70 million loss after Viva Land paid a record S$240 million to purchase the hotel in 2022.

The buyer of the Hotel Telegraph, Sunray Woodcraft Construction, was also a minority shareholder in a consortium that acquired 39 Robinson Road from Viva Land in March for S$399 million.

Truong’s husband, Hong Kong businessman Eric Chu in February, Chu sold a development site in Hong Kong’s Quarry Bay for HK$435 million (then $55.46 million), or about 36 percent less than he paid to acquire the asset in 2018.

Chu and Truong are estimated to have HK$8 billion in Hong Kong property assets including the Nexxus Building on Des Voeux Road in Central, which Chu acquired for HK$3 billion in 2009.