Unveiling the KDC Hiệp Bình Chánh Scandal: Did Tycoon Lưu Quang Lãm Mortgage Sold Land, with the Bank Turning a Blind Eye?

On August 25th, the People’s Court of Ho Chi Minh City continued the trial of defendants Luu Quang Lam (former Chairman of Dai Hai Joint Stock Company) and Ngo Xuan Truong (former Director of Dai Hai Joint Stock Company) on charges of “Fraudulent Appropriation of Property” and “Abuse of Trust to Appropriate Property.”

Mortgaging Sold Land to Banks

The case involves a residential area project in Hiep Binh Chanh Ward, Thu Duc City (formerly known as Thu Duc District).

This project has been embroiled in a long-standing dispute, causing hundreds of households to face financial losses and uncertainty.

The Hiep Binh Chanh residential area covers an area of nearly 58,000 square meters and was assigned to K&N Company (later renamed Dai Hai Company) as the investor in 2001.

In 2003, Dai Hai Company collaborated with the Ho Chi Minh City Branch of Song Da Corporation (now ANI Joint Stock Company) to divide the area into 419 land plots for villas and houses. These plots were quickly sold to individuals through capital contribution or transfer agreements.

Many purchasers had built homes and resided in the area, and some even received house numbers. However, instead of initiating procedures for land separation and granting land use rights certificates to each customer, the investor retained the master land use certificate.

The defendants mortgaged the land plots that had been sold to individuals at various banks.

The indictment determined that during his tenure as Chairman and Director in 2012, Luu Quang Lam mortgaged 115 land plots that had been sold to individuals at multiple banks to guarantee loans for various businesses. The total loan amount exceeded VND 208 billion.

From 2022 to 2024, a portion of the loan was repaid or offset by Lam and related individuals and enterprises. However, the companies still owe DongA Bank – District 1 Branch and Vietcombank – Ho Chi Minh City Branch more than VND 173 billion (including principal and interest).

There are 62 victims in this case who purchased 65 land plots. They had paid in full and used the land legitimately but could not obtain land use certificates because the original documents had been mortgaged by Lam, inadvertently turning their land into “secured assets” at the bank.

In this case, Ngo Xuan Truong is accused of using the sold land plots to offset his personal debt of more than VND 36 billion.

The indictment states that from June 24, 2008, Truong was aware that all land plots in the Hiep Binh Chanh residential area project had been sold and were awaiting the issuance of land use certificates by Dai Hai Company. However, due to his personal debts, when the legitimate land buyers submitted their documents to Dai Hai Company for land use certificate processing, Truong initiated procedures to register land use rights in the Hiep Binh Chanh area for six individuals and one organization to whom he owed money.

According to the indictment, the legitimate land buyers suffered losses (as per the contracts) of more than VND 10.7 billion, and Truong also sold the same plots to multiple individuals. In total, he appropriated more than VND 11.7 billion.

Signs of Irregularities in Credit Activities

Regarding the signs of irregularities in credit activities by DongA Bank – District 1 Branch, VCB – Ho Chi Minh City Branch, Southern Commercial Joint Stock Bank (now merged into Saigon Thuong Tin Commercial Joint Stock Bank), the Agricultural and Rural Development Bank – Nha Be Branch, and DongA Bank – District 1 Branch, the Investigation Police Agency has decided to separate the information and related documents for further verification and handling after the State Bank completes its appraisal of the loan, mortgage, and authorization procedures related to these contracts.

On August 22, the Ho Chi Minh City People’s Procuracy recommended sentencing Luu Quang Lam to life imprisonment for “Fraudulent Appropriation of Property” and Ngo Xuan Truong to 16-18 years in prison for “Abuse of Trust to Appropriate Property.”

In terms of civil liability, the Procuracy requested the defendants to repay the debts to the banks and cancel the contracts and transactions related to the mortgaged land use certificates. The banks are required to return the land use certificates to the people to proceed with the issuance of land ownership certificates.