
A jaw-dropping bank loan fraud tops November’s operational risk losses and is likely to be the highlight of the year. Truong My Lan, the main shareholder of Sai Gon Joint Stock Commercial Bank (SCB), Vietnam’s leading institution, executed a scam that stung the bank for a staggering 304.1 trillion dong (equivalent to $12.53 billion). This scandal was allegedly facilitated by SCB’s executives and board members.
Truong purportedly controlled a whopping 91.5% of the bank’s shares surreptitiously. This invisible control card enabled her to appoint relatives, pals, and associates into paramount leadership positions within the bank, paving the way for fraudulent loans and transactions.
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Related FAQs
Prior to the scam, Truong was already the majority shareholder of SCB. She used powerful networks and manipulative tactics to gain an economic majority of 91.5% of the bank shares. Her realized power enabled her to get her relatives and associates in key leadership roles at SCB from where she was able to access hefty loans for her own interests.
Q2: How Did The Scandal Affect the Operations of SCB?
With loan fraud of such gigantic magnitude, the operational risk losses for SCB skyrocketed in November. It’s projected that the scam will most likely be the most significant operational risk loss for SCB this year with the financial implications expected to be quite considerable.
Q3: What Measures has SCB taken Following the Massive Loan Fraud?
The magnitude of the financial loss necessitated immediate action. SCB, together with the relevant authorities in Vietnam, have since launched investigations to bring the perpetrators to book. To prevent similar occurrences in the future, SCB has reconsidered its risk management strategies, particularly with regards to loan issuance.