The trial, expected to last until the end of April at the People's Court of Ho Chi Minh City, is part of a much wider campaign against corruption in the country which the leader of the ruling Communist Party, Nguyen Phu Trong, has pledged for years to stamp out, with no tangible results yet.
The anti-graft drive has led in recent months to multiple high-profile arrests and the resignation of top figures, including the country's former president last year, but the trial for the chairwoman of real estate developer Van Thinh Phat Holdings Group is unprecedented for its scale, with thousands expected to be summoned and about two hundred lawyers participating in the proceedings, according to state media.
Real estate tycoon Truong My Lan and her accomplices are accused of siphoning off 304 trillion dong ($12.46 billion) from the country's largest bank by assets, Saigon Joint Stock Commercial Bank (SCB), which Lan effectively controlled through dozens of proxies, according to investigators.
A lawyer for Lan declined comment.
If proved, it could be one of the largest financial frauds in Asia. Malaysia's 1MDB corruption scandal involved for instance only about $4.5 billion.
The start of the trial featured prominently in state media which showed pictures and footage of Lan and other defendants in the courtroom surrounded by dozens of police officers.
From early 2018 through October 2022, when SCB was bailed out by the state after a run on its deposits, Lan appropriated large sums by arranging unlawful loans to shell companies, according to public investigators.
Another $1.2 billion was lost by holders of bonds issued by Van Thinh Phat, Lan's real estate firm, according to the investigators.
Lan has for years been a central figure in Vietnam's finance and orchestrated the merger of SCB with other two lenders in 2011 to salvage the troubled banks in a plan coordinated with the central bank.
She owns several properties in Ho Chi Minh City's richest district and has multiple assets abroad, according to investigators and public information.
Top international auditors, including Ernst & Young and KPMG, did not raise any concern about the bank in their audits, public documents show. They did not reply to requests for comment.
WIDESPREAD CORRUPTION
In addition to charges of embezzlement, Lan is also accused of giving bribes and of breaching banking regulations. She risks the death penalty.
Among the other defendants are Lan's husband, a Chinese national, and 15 central bank officials, including a senior inspector accused of taking bribes worth $5.2 million from Lan.
Despite years of the anti-graft campaign, known locally as "blazing furnace", corruption remains widespread in the Southeast Asian country, leading many to question motives behind any arrest.
In some provinces, up to 90% of applicants for land certificates paid a bribe, and kickbacks are also extremely common to receive medical services in public hospitals, according to a report published in March 2023 by the United Nations Development Programme and other organisations.
"Bribe-taking amounts that would trigger citizens' denouncements ranged between 20 million dong ($810) and 43 million dong ($1,742), indicating citizens' levels of tolerance of bribe-taking acts," said the report, with the upper value being five times the average monthly salary in the country.
