Thousands of Vietnamese lament life savings lost in nation’s largest financial scam

For many years, Kim Lien, a food stallholder in Ho Chi Minh City, served countless bowls of tofu soup and was able to squirrel away US$25,000 of her earnings.

But the 67-year-old watched her life savings vanish after she was persuaded by a bank employee to invest the amount into bonds that she barely understood.

Lien and 42,000 other victims have paid a huge price for trusting SCB with their investments.

“I just wanted to save my money at the bank. They told me about flexible savings that later on I know was a bond,” Lien told This Week in Asia. “All the bank officials were scammers. They stole my money.”

Court documents shown during Lan’s hearing revealed that the fraud was enabled by corrupt bank managers and government officials, as well as auditing firms that were paid handsomely to oversee SCB’s financial accounts and flag any irregularities. The court has ordered the seizure of Lan’s properties for compensation, but it is unclear how much will be repaid to the victims.

Vietnamese banks are vulnerable to fraud and mismanagement due to complex rules applicable to their operations, according to financial experts.

Lan’s 160-page indictment attested to this with charges — mostly for corruption and violation of banking rules – levelled against 86 defendants including staff working at all levels of SCB and watchdog officials.

Vietnam would not be able to tackle corruption effectively “without more rigorous reforms in the check-and-balance system and the accountability mechanism”, Giang said.

Lan’s ability to embezzle billions of dollars has raised questions about collusion between business and political elites.

Prosecutors said Lan appointed trusted allies to key leadership positions at SCB, who were each paid monthly salaries