What’s been the consequences?
SCB, Vietnam’s largest by property, misled 83-year-old Ho Thi Le Hang into buying false ties under Lan’s Van Thinh Lil Holdings Group.
One of an approximated 42,000 patients, Hang hopes to get up the US$ 500,000- all of her life benefits, raised from selling two plots of her ancestors ’ property- she parted with. While some relationship manufacturers have defaulted their loan obligations, the rest of the securities have been frozen.
After Lan’s arrest in October 2022, Vietnam’s key bank placed SCB under particular supervision to quit a run- that is, customers were withdrawing their money in fear of the business lender’s possible failure.
This year, it was reported that the central banks had pumped US$ 24 billion in specific debts as of the beginning of April, in a bid to stop SCB from collapsing. That’s similar to one-fourth of the region’s foreign exchange reserves.
However, officials have expressed concerns over how fundamental issues in Vietnam’s finance field have gone undetected.
From 2012 to 2020 SCB passed, without dark colors, assessment checks by regional offices of major global firms including Ernst & Young, Deloitte and KPMG. But after Lan’s forgery was exposed, individual assessments showed more than US$ 18 billion in accumulated costs.
Her case has even highlighted the issue with “cross-ownership ” in Vietnam’s banking sector, where personal businesspeople- including real estate developers like Lan- even hold important positions at business banks, properly using them as individual ATMs.
” Financial institutions need to put an end to the practice of providing loans to specific companies, projects in its own ecosystem or backyard firms under the same group that would endanger the healthiness and safety of the bank,” Vietnamese Prime Minister Pham Minh Chinh said in December.
Vietnam has since amended laws to strengthen shareholder limits at banks. But experts say regulation alone is not enough in the absence of effective enforcement.
“There is no guarantee that it will be the last case … Violators have bypassed the laws easily, ” Dr Nguyen Tri Hieu, a banking insider, told CNA. “ I am not surprised at the fraud. But I am surprised at the magnitude of it. ”