Authorities blame ‘rumor-mongers’ for Vietnam’s financial fears amid scandal fallout

Depositors want assurance their funds are safe, but the government has little to offer.
By RFA Vietnamese
2022.10.20
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Authorities blame ‘rumor-mongers’ for Vietnam’s financial fears amid scandal fallout Truong My Lan, the chairwoman of Van Thinh Phat Holdings Group, and three other employees have been arrested for illegally issuing bonds worth tens of millions of U.S. dollars in 2018 and 2019.
Van Thinh Phat Holdings Group

UPDATED AT 21:20 P.M ET ON 10-20-2022

Bank patrons in Vietnam are unsettled following the latest financial scandal to rock the country and taking to social media to vent, but the government has offered little in the way of a plan to assuage their fears and is instead blaming “rumor-mongers” for spooking the public.

On Oct. 6, police arrested Truong My Lan, the chairwoman of Ho Chi Minh City-based Van Thinh Phat Holdings Group, and three other employees for illegally issuing bonds worth tens of millions of U.S. dollars in 2018 and 2019 and obtaining prime real estate in the city through fraudulent means, according to a statement by the Ministry of Public Security. Reports on social media of Lan’s impending arrest sent depositors racing to withdraw their funds from the Saigon Joint Stock Commercial Bank (SCB) over suspicions of her ties to the lender.

Lan’s arrest was the latest move by Vietnamese authorities in a years-long anti-corruption drive that uncovered nearly 5,200 economic crimes and more than 520 cases of graft in the 12 months ending in September alone – an increase of 41% from the previous year – the Ministry of Public Security said last week.

Recent high-profile arrests include that of FLC real estate group chairman Trinh Van Quyet in March, former chairman of Louis Holdings conglomerate Do Thanh Nhan in April, and former director of ASA JSC Nguyen Van Nam – all for stock market fraud, according to local media outlet VN Express. Do Anh Dung, the chairman of property developer Tan Hoang Minh, was arrested in April for alleged “fraudulent appropriation of assets” after the firm bid a record 2.45 billion dong (U.S. $101,000) per square meter for a land lot in Ho Chi Minh City late last year, before pulling out of the deal in January.

Vietnam’s benchmark index and bank stocks plunged last week following news of Lan’s detention, prompting the State Bank of Vietnam to issue a statement on Oct. 10 guaranteeing SCB customers that their deposits were safe and assuring them that the Van Thinh Phat chairwoman held no management position at the bank. The central bank urged customers to refrain from withdrawing their money ahead of bond maturity and said it was undertaking “necessary measures” to ensure that SCB remained liquid and able to operate as normal.

On Oct. 14, the Ho Chi Minh City Police Department announced that it had summoned four Facebook users for “spreading false information” about SCB over the prior two days, including users T.T.M., a reporter in Binh Thanh district; T.M.K., a university lecturer in Go Vap district; N.H.P., an IT programmer in District 10; and T.C.H., from District 8.

The announcement followed the Oct. 11 summoning of Facebook user N.T.M.H. for posting information related to SCB that caused “psychological insecurity for depositors, negatively affecting social security and order.”

Beginning on Oct. 9, police departments in Binh Duong, Nghe An, Ha Nam, and Quang Ninh provinces also reported cases of “spreading false information” related to banks that they claimed had prompted “public insecurity and anxiety.” While details of the cases were not immediately clear, at least one Facebook user in Quang Ninh province identified as 28-year-old T.H.Q. was fined the equivalent of U.S. $310 for “posting false information” about people withdrawing money from banks, which authorities said had caused public panic.

RFA spoke with one Facebook user who said he was summoned by police after posting content related to SCB and Van Thinh Phat. Speaking on condition of anonymity, citing security concerns, he claimed to have been questioned for five hours and only released after an officer scrubbed his Facebook account of related material.

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Rumors have swirled around Van Thinh Phat Holdings Group after an SCB board member and a company assistant died on Oct. 8 and 9, respectively, according to state media reports. Credit: Van Thinh Phat Holdings Group

Rumors swirling

Rumors have swirled around Van Thinh Phat after 50-year-old SCB board member Nguyen Tien Thanh – the husband of Van Thinh Phat deputy director general Tong Thi Thanh Hoang – and a company assistant who was arrested along with Lan, 39-year-old Nguyen Phuong Hong, died on Oct. 6 and 9, respectively, according to state media reports. While the reports – both of which were removed within hours of their posting – did not include the causes of the two deaths, they prompted speculation from the public over their sudden nature and connection to Van Thinh Phat.

A third person named Nguyen Ngoc Duong, the 48-year-old chairman of Van Thinh Phat subsidiary Saigon Peninsula Group, also died on Oct. 14 after apparently taking his own life, according to U.S.-based Vietnamese language newspaper Nguoi Viet.

RFA was unable to confirm whether the deaths were in any way related to the scandal.

On Oct. 13, the Van Thinh Phat building in Ho Chi Minh City caught fire at around 10:00 p.m. before it was extinguished by security guards around 10 minutes later. The following day, police announced that their initial investigation found that faulty electric wiring in a freezer at a soft drink company on the 10th floor had caused the fire, but the incident prompted further speculation about possible links to the scandal. According to Google Trends, “Van Thinh Phat” was the most popular search word in Vietnam on Oct. 14, with more than 50,000 searches related to the fire.

While it remains unclear whether the three deaths and the fire have any connection to Lan’s arrest and Van Thinh Phat, the public appears shaken by the latest scandal and trust in Vietnam’s government to police the financial sector has taken a hit.

Carl Thayer, a veteran regional expert, told RFA that he views Lan’s arrest as “part of a new twist” in Secretary General Nguyen Phu Trong’s anti-corruption campaign to show that authorities mean business.

“The private sector and the very rich beneficiaries of this sector are now fair game,” he said.

“They appear to be targeted for two reasons: first, to curb their influence in the political system because it is based on wealth rather than the party; and second, to acquire wealth (rent) to distribute among the party ruling elite.”

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Quang Ninh Police meet with a Facebook user who posted information about SCB Bank, Oct. 12, 2022. Credit: State media

‘Speaking one way and acting another’

However, SCB customers appear less than confident that the government will protect their interests.

More than one RFA listener who said they are an employee of a company that banks with SCB reported not receiving their salaries last week, although RFA was unable to independently verify the claims.

Others voiced their frustrations with the way the Van Thinh Phat case was handled and expressed concern over the government’s response.

“We feel more uncomfortable now that they told us to rest assured … Such a tactic,” wrote one Facebook user named Alex Tran on RFA’s Facebook page.

“They asked people to rest assured. However, whoever has deposits should worry about them,” Facebook user Anh Khoa wrote. “We’ve worked hard our whole lives to have some savings in the bank and if we lose our money, we will [die] together with it.”

Facebook user Lang Dinh Tam noted that while the government advised depositors not to withdraw their savings from SCB, no information was provided about what measures would be taken if the bank goes bankrupt.

“We’d better be cautious to avoid losing everything,” they said.

Duong Hien Thuan went further, suggesting that in Vietnam, “all commitments are meaningless.”

“How can we trust [the government] as everyone, including the top leaders, speak one way and act another?”

Translated by Anna Vu. Written in English by Joshua Lipes.

This story has been updated to amend the date of Nguyen Tien Thanh's death

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