Opinion | Why Truong My Lan’s fraud will damage Vietnam’s economy and investment reputation in Asia
- Saigon Commercial Bank’s losses could cause the national treasury to dry up, as the government injects ‘special loans’ to keep the bank afloat
- Loss of confidence in SCB may also have a contagion effect on the banking system and economy, with other banks already reducing lending
At the time, no public connection had been made between the bank and Van Thinh Phat, but everyone knew that it was inextricably tied to the now-jailed mogul. People began queuing up to withdraw their funds, prompting a multipronged response.
Right after her arrest, the State Bank of Vietnam – the central bank – guaranteed depositors and assured the public that it was undertaking all “necessary measures” to ensure that SCB would remain solvent and operational.
At the same time, the Ministry of Public Security crushed any discussion of bank runs from social media, imprisoning several people who had posted stories about SCB as a deterrent to others.
The case against Lan and Van Thinh Phat expanded, and eventually prosecutors made the explicit link between them and SCB. The government case showed that Lan had secretly acquired 91.5 per cent of the bank, through 27 nominees, following its 2012 establishment, when three insolvent banks were merged to create SCB.
