HANOI, Vietnam (AP) — The unusually harsh death sentence given to a real estate mogul in Vietnam was a pivotal moment in the decade-long “Burning Furnace” anti-corruption campaign as the Vietnamese business community grappled with an uncertain future on Friday.
Real estate tycoon Truong My Lanwho was sentenced to death on Thursday by a Ho Chi Minh City court for orchestrating the country’s attack biggest financial fraud case of all time, was one of Vietnam’s most important businessmen for years. She was convicted of fraud worth US$12.5 billion — almost 3% of the country’s GDP in 2022 — and for illegally controlling a large bank and allowing loans that resulted in losses of 27 billion dollars, state media reported.
Vietnam typically applies the death penalty for crimes such as terrorism or murder and, according to Amnesty International, has one of the highest rates of capital punishment in the world. But a death sentence for a financial crime is rare in the country.
Thursday’s ruling marked a “major turning point” in the ongoing process anti-corruption campaign in Vietnamsaid Nguyen Khac Giang, an analyst at Singapore’s ISEAS-Yusof Ishak Institute.
“This signals that the party’s commitment to repressing corruption (…) has increased,” he said.
The Communist Party’s so-called Burning Furnace campaign began in 2013, but it wasn’t until 2018 that authorities began to scrutinize the private sector. Since then, several owners of fast-growing Vietnamese companies have been arrested. The trial of Trinh Van Quyet – former chairman of real estate company FLC, which also owns Vietnam’s third-largest airline, Bamboo Airways – is likely to be heard next. He was arrested in 2022. Giang said Lan’s trial was “an example” for future cases.
The anti-corruption campaign is a hallmark of Communist Party General Secretary Nguyen Phu Trong, Vietnam’s top politician. The 79-year-old ideologue sees corruption as a serious threat facing the party and promised that the campaign will be a “fiery furnace” where no one is untouchable.
It’s making foreign investors nervous as dampening Vietnam’s economic prospects at a time when the country has been positioning itself as the ideal home for companies looking to move their supply chains away from China. Vietnam has already lost two presidents in just over a year and the country’s bureaucracy came to a standstill with terrified officials choosing to do nothing to avoid being targeted.
Lan’s death sentence sent “shockwaves” through the Vietnamese business community, creating a “sense of uncertainty” about the future, Giang said.
The real estate sector, in particular, is struggling. An estimated 1,300 real estate companies have withdrawn from the market by 2023 and skyscrapers lie empty in major cities such as Hanoi and Ho Chi Minh City. Add to this weak global demand and reduced public investment, which slowed Vietnam’s economic growth to 5.05% last year, compared to 8.02% in 2022, according to government data.
However, despite the long campaign against corruption, public opinion on corruption in Vietnam remains mixed, according to an annual survey based on interviews with nearly 20,000 people, known as the Vietnam Provincial Governance and Public Administration Performance Index. It concluded that, although fewer people were asked for bribes, the number of people who thought the government was serious about fighting corruption had actually decreased in 2023 compared to the previous year.
Giang said these were now “uncharted waters” for Vietnam, making it impossible to predict what would come next.
“We haven’t really seen anything like this before,” he said.
