How deep is Vietnam’s financial rot?

The real estate tycoon at the center of a US$12.46 billion fraud case has been sentenced to death, a penalty which appears to have appeased an outraged Vietnamese public but may not be enough to stem rising concerns about the health of the financial system.

Truong My Lan, chairwoman of Van Thinh Phat Holdings Group, was sentenced to death on April 11 by the Ho Chi Minh City People’s Court.

The trial gripped the Vietnamese public, not least because the staggering pilfered sums were often delivered in lowly Styrofoam boxes, a common household item often reused to grow pesticide-free “clean” vegetables in Vietnamese homes.

Lan was convicted for using her influence at the local Saigon Commercial Bank (SCB) to orchestrate a scheme involving 916 false loan applications and the embezzlement of over 304 trillion dong ($12.46 billion) from SCB between 2018 and 2022 – a sum larger than the capitalization of most Vietnamese banks.

In her confession, Lan admitted to paying a bribe of $5 million in cash to Do Thi Nhan, the former head of Inspection and Supervision Department II under the State Bank of Vietnam. The money was reportedly concealed within three Styrofoam boxes.

The case likely only scratches the surface of endemic systemic corruption in Vietnam, where bribery is known to be deeply ingrained in the Communist Party-dominated political and economic systems.

(In another well-publicized case, Phan Van Anh Vu, nicknamed “Vu nhom”, the former chairman of Bac Nam 79 Construction JSC, reportedly also used Styrofoam boxes to transfer a $4 million bribe to Nguyen Duy Linh, a former high-ranking official in the Ministry of Public Security.)

The scale of the alleged corruption in the Van Thinh Phat case has sent shockwaves through