Bad debt sales
From March 5 to April 29, the Ho Chi Minh City Court will hear a first-instance trial of Van Thinh Phat Group and SCB bank. According to the indictment, when the overdue loans had to be accounted as bad debt group 5, while the credit growth rate was restricted according to the regulations of the State Bank, Ms. Truong My Lan – Chairwoman of the Board of Directors of Van Thinh Phat Group – not only did not repay the debt but also instructed the accomplices to carry out the scheme of selling bad debts to the Asset Management Company (VAMC) and selling slow payment debts to “ghost” companies set up by Van Thinh Phat group to conceal part of the bad debts, not to account for interest, reduce credit balances to continue misappropriating money from SCB bank.
 Ms. Truong My Lan – Chairwoman of the Board of Directors of Van Thinh Phat Group – instructed the subordinates to conceal false information, report incorrect results of inspection, not honest, and incomplete. |
The investigation results determine that during the period from January 1, 2012 to October 7, 2022, Truong My Lan and accomplices directed the objects at SCB to sell bad debts to VAMC, sell debts of slow credit, offset debts of 269 loans/216 customers, the disbursed principal amount is nearly VND 133,336 trillion. As of October 17, 2022, there is still a total outstanding debt of over VND 200,452 trillion, including nearly VND 130,810 trillion of principal debt (accounting for 27% of the total principal debt of Truong My Lan’s group) and over VND 69,642 trillion of interest debt.
Among them, SCB sold bad debts to VAMC of 69 loans/39 customers, the disbursed principal amount is over VND 51,397 trillion, the total outstanding debt as of October 17, 2022 is over VND 84,231 trillion.
SCB sold slow payment debts of 148 loans/132 customers, the disbursed principal amount is over VND 58,803 trillion, the total outstanding debt as of October 17, 2022 is nearly VND 87,503 trillion. Offset of 52 loans/45 customers, the disbursed principal amount is over VND 23,135 trillion, as of October 17, 2022, the total outstanding debt is over VND 28,718 trillion.
To conceal the criminal acts when inspected, Truong My Lan directed the key officers of SCB to bribe officials, leaders of the Banking Supervision and Inspection Agency, leaders of the State Bank’s branch in Ho Chi Minh City, Deputy Head of the Supervision Department at SCB to hide false information, report dishonest and incomplete results of inspection.
In addition, Truong My Lan directed the key leaders of SCB bank to allocate her loans at the main branches such as Sai Gon, Cong Quynh, Pham Ngoc Thach, Ben Thanh to other branches such as Dong Sai Gon, Cu Chi, Tan Dinh… to reduce the attention of the authorities.
During the period of 2017 – 2018, the inter-sectoral inspection team focused on inspecting the Pham Ngoc Thach branch because signs of violations were discovered. To cope with this, Truong My Lan instructed to settle her loans at this branch by creating new loans at other branches, using disbursed funds to settle her loans at the Pham Ngoc Thach branch.
It is worth noting that after falling under special surveillance, SCB bank signed a contract to hire Hoang Quan Valuation Company to evaluate the bank’s assets, as of September 30, 2022.
Ms. Lan withdrew money from SCB bank through the trick of creating false loan files. |
Collateral inflation
Regarding the loans of Truong My Lan group – Van Thinh Phat Group, there are 1,166 collateral codes for 1,284 loans, the total value of recorded collateral assets on the books is VND 1,265,504 trillion.
Among them, Hoang Quan Valuation Company valued 726 collateral codes with a re-evaluated value allocated of VND 253,561 trillion. The remaining codes are not valued and have a book value allocation of VND 622,476 trillion. The reason is that the assets are shares, property rights, real estate without sufficient records, asset legalities, some assets are not within the scope of re-evaluation.
Of the 726 mentioned assets, 517 collateral codes have sufficient legal conditions for collateralization, pledging to calculate the asset value when making provisions for risks, the allocated value according to proposals or collateral contracts is VND 179,196 trillion.
More than 200 remaining codes do not meet the legal conditions (no collateral contracts, unnotarized collateral contracts, unregistered assets that meet the requirements…) so SCB cannot process the assets, not eligible to calculate the asset value when making provisions for risks.
According to the indictment, to withdraw money from SCB through the trick of creating false loan files, Truong My Lan directed SCB staffs to conspire with counterparts at appraisal companies, issue legitimate valuation certificates for her loan files.
The investigation results determine that SCB hired 19 appraisal companies/46 entities including directors, deputy directors, appraisers, and staffs to issue and participate in issuing 378 relevant certificates for the remaining loans by Truong My Lan.
Up to now, there have been 5 valuation companies (TAM NHIN MOI Company, MHD Company, Thien Phu Company, Exim Company, DATC Company), 7 individuals including directors, deputy directors, appraisers, individuals who act as intermediaries issuing 23 legitimate valuation certificates for loans by Truong My Lan group.
 The loans of Truong My Lan group – Van Thinh Phat Group have been inflated and recorded on the books as VND 1,265,504 trillion.
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To legitimize the files, withdraw money from SCB, Truong My Lan and accomplices used many assets without legal conditions, inflated prices to include them as collateral for the loans.
For 1,284 loans under the responsibility of Truong My Lan, there are 1,166 collateral codes with a book value of SCB bank of VND 1,265,504 trillion, but Hoang Quan Valuation Company only valued 726/1,166 collateral codes. The remaining 440 collateral codes were not valued because the assets are shares, stocks, property rights, real estate without sufficient records, asset legalities…
When needing to withdraw legal assets for sale or use for other purposes, Truong My Lan instructed the accomplices to exchange, withdraw secured assets with a lower value to replace the withdrawn assets. Most of them have a lower value than the withdrawn assets.
In order to facilitate the exchange of collateral assets, Truong My Lan and accomplices at SCB bank did not carry out collateral transaction registration as prescribed or disguised them as “property rights” to avoid collateral transaction registration.
Among the 1,284 loans under the responsibility of Truong My Lan, there are 240 collateral assets whose total book value on the books is VND 487,451 trillion, converted into 278 collateral assets, the book value is VND 351,948 trillion. Hoang Quan Valuation Company only valued 260/278 collateral assets with a total value of over VND 108,109 trillion.
Duy Quang
