The Appeal Trial of the Van Thinh Phat Case Phase 1: Lawyers Request a “Special Mechanism”

On November 18, the Ho Chi Minh City High-Level People’s Court continued the appellate trial for Truong My Lan, former chairman of Van Thinh Phat Group, and 47 accomplices. These defendants had appealed the first-instance verdict of the Ho Chi Minh City People’s Court.

Dispute over the amount of damages continues

During the debate with the representative of the VKSND High-Level Court in Ho Chi Minh City, the defendant Truong My Lan expressed her disagreement and requested clarification regarding the information related to the amount she was accused of embezzling. Accordingly, the first-instance verdict ordered Lan to compensate Saigon Joint Stock Commercial Bank (SCB) more than VND 673,000 billion.

Defendant Lan argued that since the announcement of the first-instance verdict, she has not had sufficient documents to clarify the amount she was accused of embezzling. Due to the massive case file (more than 6 tons), her lawyer could not make complete copies. After accessing new information, the defendant discovered that she was accused of embezzling more than VND 415,666 billion in principal debt from SCB, including a principal amount of VND 125,000 billion left by customers before her involvement in the restructuring.

Defendant Lan asserted that these loans were taken out before SCB’s consolidation on January 1, 2012, and were mainly associated with Mr. Le Quang Nhường’s circle of friends, the former chairman of SCB, and related to the old banks (the debt of Cho Vai project left by the First Bank).

Defendant Lan affirmed that these loans were not related to her, and it was unreasonable to conclude that she had embezzled the principal amount. She requested a confrontation with SCB, and her lawyers would submit a detailed document regarding these debts.

Another issue that arose was that before her arrest, defendant Lan had lent SCB three buildings (Ba Son building, Windsor building, and a building at 87 Cong Quynh, District 1) worth about VND 67,000 billion to restructure a debt of VND 65,000 billion. Defendant Lan stated that there was no clear evidence proving that SCB had disbursed this amount to Van Thinh Phat Group in 2018 as accused. She requested a confrontation to clarify these figures.

Continuing to express her views on determining damages in the case, defendant Lan argued that to ascertain the actual damages, SCB’s mortgaged assets must be liquidated or sold off. However, SCB has not done so. Defendant Lan pointed out that SCB’s current total assets are VND 714,000 billion, and if the accused embezzlement amount (over VND 673,000 billion) is deducted, there is no actual loss.

The presiding judge requested that SCB representatives take note of these issues for later discussion.

Enough money to rectify the situation!?

Supplementary defense counsel for defendant Lan emphasized that there were numerous debts from three old banks before the merger, which SCB inherited, leaving defendant Lan to resolve and handle these debts. Therefore, the lawyer argued that the amount of VND 415,666 billion needs to be reconsidered.

In addition, the lawyer also pointed out three other amounts that should be deducted. Specifically, according to the investigation conclusion on November 12, 2023, SCB’s current assets are VND 45,188 billion; debt-pledged assets are VND 32,832 billion, and the risk reserve and depreciation of fixed assets are VND 23,300 billion. Based on these figures, the lawyer argued that if these amounts are further excluded, there would not be enough financial resources for SCB to enable defendant Lan to commit the alleged embezzlement.

Although disagreeing with the amount of embezzled money, the lawyer emphasized that defendant Lan committed to rectifying all the consequences of the case. However, the lawyer argued that since this is a unique case unprecedented in the history of prosecution, a “special mechanism” is required to resolve it. This mechanism entails identifying all of defendant Lan’s assets currently held by SCB, as well as those that have been seized and frozen, along with the properties that defendant Lan voluntarily contributes to rectify the situation. These can be considered sources of money to offset the embezzled amount or the money that defendant Lan must repay, and it need not be in the form of cash. Requiring defendant Lan to pay cash immediately to rectify the situation is impractical, as most of her assets have been frozen.

In reality, these assets are currently under state management. Converting these assets into cash is only a matter of time. Whether sooner or later, this process will generate funds to rectify the situation, enabling defendant Lan to fulfill her financial obligations without the immediate need for cash payment.

Moreover, the lawyer argued that in the proposed plan to rectify the consequences presented to the Council, the lawyers and defendant Lan had identified available financial sources and assets to rectify the consequences. The total value of these sources amounts to approximately VND 700,000 billion, sufficient to address all of defendant Lan’s criminal and civil liabilities. Furthermore, on October 21, Ho Chi Minh City issued Decision No. 79, adjusting land prices within the city. Accordingly, land prices will increase significantly from October 31, 2024.

The lawyer provided the example of the Times Square building (on Nguyen Hue Street, District 1). The current land price in this area is VND 162 million/square meter, but according to Decision No. 79, the price will quadruple. This implies that the value of the secured assets, including land use rights, will also increase considerably. Therefore, the lawyer argued that with the “special mechanism,” defendant Lan’s commitment to rectifying all consequences would not be an empty promise.

Defendant Lan has paid VND 380 billion

According to a report from the Ho Chi Minh City Civil Judgment Enforcement Agency, the total amount of money currently held in the account, including funds transferred by the Ministry of Public Security and amounts paid by individuals and organizations, exceeds VND 4,250 billion and USD 27 million.

Defendant Lan has paid VND 380 billion. Two of her relatives, her husband, and her granddaughter, have also contributed to the rectification: defendant Chu Lap Co paid more than VND 24 billion, and defendant Truong Hue Van paid VND 13 billion. The individual who has paid the most in cash for rectification thus far is defendant Duong Tan Truoc (former General Director of Tuong Viet Trading and Production Co., Ltd.), who has contributed over VND 485 billion.