Police reports indicate that all 24 officials from the central bank assigned to scrutinize SCB were implicated in a bribery scandal, with illicit payments ranging from VND100 million ($4,137) to $5.2 million to overlook serious infractions by the bank. The Ministry of Public Security has proposed charges against Do Thi Nhan, the former chief of the State Bank of Vietnam’s inspection unit, for allegedly accepting $5.2 million in bribes from SCB, which, under Truong My Lan’s management, misappropriated VND1 quadrillion ($44 billion) from public deposits over ten years.
Furthermore, the ministry has suggested indicting 16 other inspectors for misuse of power and dereliction of duty. Seven others have been exempted from charges due to their cooperation with the investigation and the return of their illicit gains.
According to the police, Nhan became aware of the fraudulent activities in August 2017 but manipulated the findings as the lead investigator, enabling SCB to continue its operations unimpeded. During a discussion with Lan, who had an unofficial 91.5% stake in SCB, in Ho Chi Minh City in October 2017, Nhan advised asset liquidation to repay depositors due to the gravity of the violations. Lan solicited Nhan’s assistance, leading to the omission of VND38 trillion in bad debts from the reports and the distortion of critical financial metrics of the bank. Nhan misrepresented the bad debt ratio, reducing it from the actual 35.8% to a reported 6.8%.
In a subsequent meeting in Hanoi in March 2018, Nhan informed Lan of additional infractions by 71 SCB clients involved in her network. Upon Lan’s request, Nhan directed her team to disregard the origin of these clients’ funds and to diminish the probe, ignoring the fact that SCB had been issuing new loans to these customers to settle previous ones.
Nhan, along with her supervisor Nguyen Van Hung, the SBV’s deputy chief inspector, admitted to altering the investigation reports to hide the fraud from the central bank and the government. The inspectors were found to have taken bribes from SCB, with Nhan receiving the largest sum of $5.2 million.
The ministry has also recently recommended that Lan face multiple charges, including bribery, breaching banking regulations, and embezzlement. Additionally, 85 others have been suggested for similar charges, along with the misappropriation of assets through abuse of trust.
The police have reported that Lan and her associates have inflicted losses of VND500 trillion on SCB. Following a bank run in October 2022, the central bank placed SCB under special supervision to avert a systemic crisis in the banking industry.
