Why was the Vietnamese real estate billionaire sentenced to death?

The accusations echo the epic collapses of other real estate fortunes in some of Asia’s biggest economies, notably China. There is Country garden properties for example, President Yang Huiyan, whose company actions suspended last week after his default on external debt in October last year, which is the latest development in its deepening. Debt crisis. When the company could not repay its external debt, it had to $187 billion in liabilities, and for months had been getting rid of its assets and selling shares to avoid its debts. In November, Country Garden said it would have to repay nearly $15 billion in debt over the next 12 months, while revealing a loss of $7.1 billion for the first six months of the year.

Its rival real estate group, Evergrande, led by its CEO Hui Ka Yan, filed for bankruptcy last August, while China’s securities regulator hit the real estate giant with a $78 billion fraud accusation for increase your income from 2019 to 2020. This is one of the largest fraud cases in the country’s history. The CEO was arrested last September on suspicion of financial crimes, Evergrande said in a deposit on the Hong Kong Stock Exchange.

The biggest charge against My Lan related to embezzlement from Saigon Commercial Bank (SCB) between February 2018 and October 2022. The trial, which lasted five weeks, took place under tight security at the Ho Chi People’s Court Minh City, where more than 80 other people central bank officials have been charged in this case, including My Lan’s husband and niece.

My Lan embezzled funds 12 billion dollarsand was found guilty of taking out $44 billion in loans from the bank between 2012 and 2022, according to a Vietnamese online newspaper. VN Express, representing more than 93% of the bank’s loans during this period. The verdict forces him to return $27 billion, a sum that exceeds the market capitalization of most Vietnamese banks. This caused panic among SCB’s depositors, triggering a run on the bank and, ultimately, the State Bank of Vietnam taking control of the lender. Since Vietnam’s criminal laws began applying embezzlement to non-governmental persons in 2018, VN Express reported, My Lan’s actions were filed under this charge.

My Lan’s defense lawyers argued that she controlled only about 15% of the bank and that she held no official position there after a merger in 2011. Court judges, however, estimated that Lan had a majority stake of more than 90 % of the bank through proxies. .

The ultra-rare white-collar death penalty

However, the death penalty remains a rare punishment for economic crimes, to say the least. One of the few other death sentences, also widely publicized, for a corruption charge was in 2013after two former Vietnam National executives Shipping Lines was convicted of embezzlement.

In Vietnam, the death sentence can be awarded for 22 crimes, including murder, armed robbery, drug trafficking, rape, child sexual abuse and for economic crimes such as bribery, bribery, fraud and embezzlement . The majority of death sentences in the country are for drug crimes, according to Amnesty International, which states in a 2023 report that more than 102 people were sentenced to death in 2022. The number of executions is unclear due to “secrecy surrounding the figures and limited access to information” . And while a death sentence for embezzlement is rare, it doesn’t take much for it to be handed down: the embezzlement of as little as 500 million Vietnamese dong, or $20,000, from government funds may face a death sentence, according to a report. Washington Post report.

Vietnam is in the middle of a multi-year period anti-corruption campaignwhich was rage since 2016 and led by Communist Party Secretary Nguyen Phu Trong. In fact, the Communist Party called its repression the “fiery furnace“, for the party’s intense focus on reducing the country’s economic corruption. The campaign launched resignations of two of the country’s presidents in just two years, according to The Associated Pressand comes as the country has become a global supply chain hub for companies like Apple And Samsung Electronics, with the two technology giants to relocate manufacturing units across the country over the past year.

China’s real estate sector has been devastated by these two major flaws. THE The IMF reviewed the sector in Februaryand contextualized the more than 60% decline in housing starts (i.e. new construction) compared to pre-pandemic levels: “a historically rapid pace that has only been observed during the biggest housing crises across the country over the past three decades.” RésiClub» reported Lance Lambert that the housing crisis in the United States pales in comparison to that of China, with a continued and sharp decline in housing sales, housing construction and residential investment, as well as a decline in real estate prices , in addition.

On April 2, property group Country Garden said that “due to continued volatility in the sector”, the group’s operating environment was “becoming increasingly complex”, before announcing its report on the results would be delayed.

Following fraud allegations surrounding the Evergrande Group, the company’s mainland business, Hengda Real Estate, was also fined $583.5 million, and its CEO faces a potential lifetime ban from Chinese financial markets. This was also ordered by a Hong Kong court to liquidateand the Chinese authorities have recently started examine the role of PricewaterhouseCoopers LLP in China regarding the accounting practices of the Evergrande group.

And the bad news for the real estate giants just keeps coming. Shenzhen-based real estate group China Vankewhich also ranked second in terms of sales in the country last year, recorded a 46% drop in profits compared to 2023.