HANOI, Vietnam (AP) — The unusually harsh death sentence of a real estate tycoon in Vietnam was a pivotal moment in the decade-long “Blazing Furnace” anti-corruption campaign as Vietnam’s business community grappled with an uncertain future Friday.
Real estate tycoon Truong My Lan, sentenced to death by a Ho Chi Minh City court on Thursday for orchestrating the country’s biggest ever financial fraud case, was for years one of Vietnam’s most important businessmen. She was convicted of defrauding $12.5 billion – nearly 3% of the country’s GDP in 2022 – and of illegally controlling a major bank and granting loans that resulted in losses of $27 billion , state media reported.
Vietnam typically imposes the death penalty for crimes such as terrorism or murder and has one of the highest death penalties in the world, according to Amnesty International. But a death sentence for a financial crime is rare in the country.
Thursday’s conviction marked a “major turning point” in Vietnam’s ongoing anti-corruption campaign, said Nguyen Khac Giang, an analyst at the ISEAS-Yusof Ishak Institute in Singapore.
“It signals that the party’s commitment to fighting corruption… has increased,” he said.
The Communist Party’s so-called “Blazing Furnace” campaign began in 2013, but it wasn’t until 2018 that authorities began scanning the private sector. Since then, several owners of Vietnam’s fast-growing companies have been arrested. The next trial is expected to be against Trinh Van Quyet – the former chairman of real estate company FLC, which also owns Vietnam’s third-largest airline Bamboo Airways. He was arrested in 2022. Giang said Lan’s trial was “an example” of cases to come.
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 major threat to the party and has vowed that the election campaign will be a “blazing furnace” in which no one is untouchable.
It is making foreign investors nervous while dampening Vietnam’s economic prospects at a time when the country is positioning itself as an ideal location for companies looking to shift their supply chains away from China. Vietnam has already lost two presidents in just over a year, and the country’s bureaucracy has ground to a halt, with frightened officials choosing to do nothing to avoid being caught in the crosshairs.
Lan’s death sentence sent “shock waves” through the Vietnamese business community and created a “sense of uncertainty” about the future, Giang said.
The real estate sector in particular is faltering. An estimated 1,300 real estate companies will have withdrawn from the market in 2023 and high-rise buildings will sit empty in major cities such as Hanoi and Ho Chi Minh City. Added to this, weak global demand and lower public investment slowed Vietnam’s economic growth to 5.05% last year compared to 8.02% in 2022, according to government data.
Meanwhile, despite the long anti-bribery campaign, public opinion on corruption in Vietnam remains mixed. This is 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 found that while fewer people were asked for bribes, the number of people who thought the government was serious about fighting corruption fell in 2023 compared to the previous year.
Giang said this was now “uncharted territory” for Vietnam and it was impossible to predict what would come next.
“We’ve never seen anything like this,” he said.