Van Thinh Phat Group, whose founder Truong My Lan has been arrested for alleged bribery and other violations, commandeered an empire of more than 1,000 businesses, said investigators.
The group hired hundreds of individuals as its legal representatives, according to the Ministry of Public Security's investigative agency.
The agency has found many violations in Lan’s case including embezzlement, violating banking regulations, giving and receiving bribes, abusing positions and power while performing official duties, lack of responsibility causing serious consequences, and abusing trust for property appropriation. It has recommended that Lan be prosecuted for giving bribes, violating banking regulations and embezzlement.
According to investigators, the Van Thinh Phat ecosystem operated under the joint stock company model with Van Thinh Phat Group playing a central role, holding shares and controlling all activities of companies in the ecosystem without direct involvement in business activities. The group is mainly involved in real estate, restaurants and hotels.
Vast network
The Van Thinh Phat ecosystem consists of more than 1,000 businesses including member companies at home and abroad, divided into four groups.
The first group includes financial institutions in Vietnam such as Saigon Commercial Bank (SCB), Tan Viet Securities JSC, and Viet Vinh Phu Financial Investment Corporation, in which SCB plays a particularly important role as a financial tool to fund companies in the ecosystem.
The second group features companies with business activities in Vietnam, mostly operating in real estate, restaurants and hotels. They have large charter capital and hold dominating stakes in member companies, like Saigon Peninsula Group Corporation with a charter capital of VND18 trillion ($744.26 million) and An Dong Investment Group JSC with VND9 trillion ($327.13 million).
The third group comprises "ghost” companies in Vietnam, established as legal entities to help Van Thinh Group contribute capital to projects, borrow money from banks, carry out debt rollovers or sign cooperation contracts.
The fourth group is a network of many shell companies in "tax haven" territories and countries to serve investment and business activities abroad or for investing in Vietnam as "foreign investors." These are responsible for managing the capital and assets of Lan’s family abroad.
Family-run business
Van Thinh Group, with a charter capital of VND13 trillion ($537.6 million), has Truong Hue Van, Lan's niece, as CEO. This group has four shareholders: Truong My Lan, who holds a 60% stake; Elizabeth Chu Yuet Han (or Chu Duyet Hang), daughter of Lan, 10%; Mary Chu Yuet Fan (or Chu Duyet Phan), another daughter, 10%; and Emerald JSC, represented by Truong Hue Van, 20%.
The board of directors consists of chairwoman Truong My Lan; vice chairwoman Ngo Thanh Nha; members Chu Duyet Hang, Chu Duyet Phan, Truong Lap Hung (Lan's nephew), and Truong Hue Van.
The Van Thinh Phat Investment Group JSC has a charter capital of VND12.8 trillion ($259.36 million) with Ngo Thanh Nha, Lan's sister-in-law, as CEO. The company’s four shareholders are Van Thinh Phat Group, owing a 49% stake; Chu Duyet Hang, 15.5%; Chu Duyet Phan, 15.5%; and Emerald JSC, 20%.
The board of directors comprises chairman Truong Chi Trung (Lan's younger brother), and Truong Lap Hung and Truong Hue Van as members.
Saigon Peninsula Group has a charter capital of VND18 trillion ($744.26 million) with 10 individual shareholders and 21 institutional ones. Its legal representative was CEO Nguyen Ngoc Duong (deceased). The board of directors includes chairman Truong Vincent Kinh and two members Kwok Hakman Oliver and Nguyen Phuong Anh.
Viet Vinh Phu Financial Investment Corporation, with a charter capital of VND2,868 billion ($118.68 million), has Truong Hue Van as its largest shareholder, owning a 50.50% stake.
There are a number of other companies generating revenue for Van Thinh Phat Group, including Windsor Property Management Group, An Dong Investment Group, Times Square Vietnam Investment JSC, Saigon Handicraft Import-Export JSC, Thien Phuc International Hotel Company Limited, and Vinametric Ltd.
Major projects
Van Thinh Phat Group has invested in the 56,293-square meter Bonville residential area in Ho Chi Minh City’s Binh Chanh district and many other projects.
The major project of Van Thinh Phat Investment Group JSC is the 264,633 square meter Sterling Residence residential area in HCMC’s Southern New Urban Area.
Saigon Peninsula Group plans to develop the Cape Red Light Park and an urban housing area in Phu Thuan ward, District 7, HCMC on an area of more than 1.17 million square meters. The project is in the process of completing investment procedures.
Ghostly inaction
The Ministry of Public Security’s investigative agency said that Lan had set up the ghost companies via accomplices to serve her personal purposes.
She directed the group of individuals at Van Thinh Phat Group to establish and use thousands of legal entities to get loans, transfer/receive money to/from abroad, issue bonds, register projects, restructure share ownership, and transfer shares and assets to individuals for personal purposes.
The investigative agency's conclusion also stated that a large number of "ghost" companies established by Lan did not engage in any business activities and were only used to register loans with SCB and make fake documents to withdraw money from the bank.
In addition, Lan also instructed her subordinates to hire thousands of individuals to register for loans at SCB; be legal representatives of the "ghost" companies; open accounts to receive money and withdraw cash for personal purposes.
As of October 2022, SCB had a charter capital of VND15.23 trillion ($630 million) with a total of 4,129 shareholders recognized by the State Bank of Vietnam. In particular, Lan owned nearly 91.536% of the bank’s charter capital in the names of 27 legal entities and individuals. She directly owned 4.982%.