Vietnam's imprisoned tycoon seeks government nod for 930 trillion dong restructuring plan
[HO CHI MINH CITY] Imprisoned for orchestrating Vietnam's biggest financial fraud, property mogul Truong My Lan is seeking the government's nod for a 12-year, 930 trillion dong (S$45.5 billion) restructuring plan that proposes the involvement of global financial heavyweights Rothschild and UBS, as well as consulting firm Alvarez & Marsal and Singapore-based Greenmark Construction.
According to recent local media reports, the proposal – submitted separately by Lan from jail and by her real estate group Van Thinh Phat (VTP) to the authorities – outlines a road map to mobilise capital for property projects and restructure Saigon Joint Stock Commercial Bank (SCB), from which she embezzled 304 trillion dong.
The road map includes asset recovery, project revenue generation, and strategic investor participation in a bid to remedy the losses and reduce Lan's sentence by repaying at least three-fourths of the embezzled money.
On Jun 18, Lan, currently detained at the T17 Detention Centre in Ho Chi Minh City, held a working session with representatives of her group and two German advisory firms that have agreed in principle to provide US$3 billion to fund the proposed plan.
In a May letter to the authorities, she said that her decades of real estate experience and deep knowledge of the 1,166 secured assets for loans from SCB put her in the best position to turn them into 'golden geese' – income-generating assets that could help the state recover its losses.
The latest 12-year plan reflects a last-ditch bid to secure leniency, as Vietnamese law allows a death sentence to be commuted if at least three-fourths of the embezzled funds are repaid.
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Rothschild, Alvarez & Marshal, and UBS were invited as strategic partners for international capital mobilisation, while Germania Helvetica Group and Milcon Gulf are being tapped for their expertise in corporate and bank restructuring, according to VTP's proposal cited by online outlet VnExpress.
Singapore-based Greenmark Construction also features among the invited partners, along with local property developers NovaGroup and Hung Thinh.
Lan was sentenced to death in 2024 for embezzling billions of dollars, bribery, bond fraud, and money laundering. She will be spared from the death penalty following a law change on Jun 25. Lan has been ordered to repay 674 trillion dong to SCB and an additional 30 trillion dong to bond investors.
The Business Times had reported that Lan's prior effort to secure foreign support saw Malaysian tycoon Vincent Tan, founder of the Berjaya Group, agree to acquire the Sterling Residence development. This was part of her broader asset-recovery strategy, but there has been no official announcement on the progress or outcome of that plan.
A three-pronged plan
Under the proposed remedy scheme, VTP and its group of investors will disburse an initial US$2 billion in capital immediately upon receiving government approval.
This first phase aims to stabilise SCB's operations, ensure liquidity for deposited funds, repay overdue debts, supplement working capital, and fund the completion of several large-scale, viable projects.
The second phase, spanning the next five years, will see investors deploy some US$8 billion raised from partners and investment funds to develop legally cleared projects, with the aim of generating revenue from these assets.
In the final phase, over the following seven years, investors plan to raise additional financing from domestic and international lenders to support major development projects, projected to yield around 680 trillion dong in revenue.
Key projects include prime real estate in Ho Chi Minh City, such as 87 Cong Quynh Street, 289 Tran Hung Dao Street, the Nguyen Hue-Amigo Quadrangle, and Mui Den Do (the Saigon Peninsula).
During this period, VTP expects to use the generated income from the three phases to repay the special loans from the State Bank of Vietnam – the country's central bank – and fulfil other financial obligations.
SCB had previously received a multibillion-dollar bailout from the central bank following a 2022 bank run, which was triggered by the arrest of Lan, the lender's de facto owner, Reuters reported in March.
No further rescue from central bank
VnExpress noted that under Lan's 12-year remedy plan, SCB would not require additional loans from the central bank.
This differs from an earlier proposal made by Sun Group, which was mandated by the central bank in November 2023 to assist SCB, the Reuters report indicated.
In February this year, the developer submitted a 15-year rescue road map that indicated the central bank's lending could reach 657 trillion dong in the first year of restructuring the troubled lender, which could then start repaying the debts from year 14, subject to market conditions.
In April, Dau Tu newspaper reported that the central bank was also drafting a plan to restructure SCB and was seeking suggestions from relevant bodies, though details of the plan and its submission timeline were not disclosed.
The central bank and government have consistently appealed to the private sector, particularly foreign investors, to support the troubled lender. Vietnam's standard foreign ownership cap in commercial banks is 30 per cent, recently extended to 49 per cent for selected lenders that have taken over struggling peers.
As at end-February this year, the non-performing loan ratio at SCB – one of the five ailing banks that are under special supervision by the authorities – stood at 98.5 per cent, Viet Dragon Securities Corporation wrote in a recent analysis, citing a report from the central bank.
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