The court's decision marks one of the harshest penalties ever imposed for white-collar crime and underscores the magnitude of the country's largest financial fraud incident, which inflicted damages equivalent to 3% of Vietnam's GDP.

Truong My Lan, the 67-year-old chairwoman of real estate company Van Thinh Phat Group, was arrested in 2022 on charges that included bribery of government officials and violation of bank lending rules. Her charges closely resemble the downfall of other real estate moguls in Asia, notably in China.

This verdict comes as China's real estate industry reels from the defaults of prominent companies like Country Garden Holdings and Evergrande Group. Country Garden, led by chairwoman Yang Huiyan, recently suspended its shares following a default on overseas debt. Similarly, Evergrande filed for bankruptcy protection and faced a $78 billion fraud accusation from China's securities regulator.

Truong My Lan's primary charge involved embezzling funds from Saigon Commercial Bank (SCB) over a four-year period. The trial, which lasted five weeks, took place under tight security at the Ho Chi Minh City People's Court. More than 80 individuals, including central bank officials, were also implicated in the case, including My Lan's husband and niece.

Vietnamese news outlet VN Express reported that My Lan embezzled approximately $12 billion and obtained $44 billion in illicit loans from SCB between 2012 and 2022. These actions accounted for over 93% of the bank's total lending during that period. As part of the verdict, My Lan is required to repay $27 billion, an amount surpassing the market capitalization of most Vietnamese banks.

The severity of the verdict triggered panic among SCB depositors, leading to a bank run and subsequent government intervention. The State Bank of Vietnam assumed control over SCB to stabilize the situation. Since 2018, when Vietnam's criminal laws expanded to include non-government entities, My Lan's actions have been classified as embezzlement.

Defense lawyers argued that Truong My Lan only controlled a 15% stake in SCB and held no official position in the bank since a merger transaction in 2011. However, the court judges found evidence suggesting she held a controlling stake of more than 90% through proxies.

It is important to note that the death penalty is a seldom-imposed sentence for economic crimes in Vietnam. One of the few previous high-profile death penalty convictions for corruption dates back to 2013 when two former executives of Vietnam National Shipping Lines were found guilty of embezzlement.

Vietnam allows the death penalty for 22 offenses, including murder, armed robbery, drug trafficking, sexual abuse of children, and economic crimes such as corruption, fraud, and embezzlement. While the majority of death sentences in the country are related to drug offenses, Amnesty International reported that more than 102 people received death sentences in 2022 with limited information on the actual number of executions.

Truong My Lan's conviction reflects Vietnam's ongoing anti-corruption campaign, which began in 2016 under the leadership of Communist Party Secretary Nguyen Phu Trong. The country's intensified efforts to combat corruption have led to the resignation of two presidents in recent years. These actions are particularly relevant as Vietnam becomes an increasingly vital hub in the global supply chain, with major companies like Apple and Samsung relocating their manufacturing units there.

China's real estate industry has also suffered significant setbacks, with a sharp decline in housing starts and major defaults from industry giants like Country Garden and Evergrande Group. The repercussions have been felt across the sector, as evidenced by the reported profit plunge of Shenzhen-based real estate group China Vanke.

As the fallout from these fraud cases continues to unfold, authorities are scrutinizing the role of accounting firms like PricewaterhouseCoopers LLP in China in relation to Evergrande Group's financial practices.

The sentencing of Truong My Lan underscores the government's determination to tackle economic corruption head-on, ensuring a more transparent business environment in Vietnam.