HANOI – Vietnam police are seeking assistance from investors in an ongoing investigation into real estate firm Van Thinh Phat Holdings Group, which allegedly defrauded and appropriated more than 30 trillion dong (S$1.7 billion), according to a statement on the government’s website.

Some 42,000 investors lost money in the bond scam, according to the investigation. Van Thinh Phat and its affiliates are accused of illegally issuing bonds to raise money from the investors from 2018 to 2020.

Police have said they are looking into the relationship between the company’s chairwoman Truong My Lan and the issuance and trading of bonds of some companies where trillions of dong were allegedly appropriated in 2018 and 2019. 

The Ministry of Public Security is seeking assistance from affected investors into its investigation, according to the statement, which cited Major-General Nguyen Van Thanh, deputy head of the Department for Investigation of Corruption and Economic Crimes.

The ministry detained Lan in 2022 for allegedly obtaining property through fraudulent means. The arrest of Lan and other company officials, who are believed to have connections with Saigon Commercial Bank, also known as SCB, led to a brief bank run on the lender. 

The investigation takes place as the country’s regulators also grapple with a property debt crisis that is weighing on the nation’s economy. Vietnam’s property sector woes raise risks for banks as real estate companies become less able to service debt, according to Moody’s Corp. 

Privately held Van Thinh Phat, which has held prime land in the nation’s commercial hub of Ho Chi Minh City, also invests in financial services, according to its website in 2022.

The State Bank of Vietnam has worked to secure SCB’s operations, replacing its board and reassuring customers that their deposits were safe. The regulator on Sept 22 announced that it had appointed Mr Phan Dinh Dien, a former member of the board of directors at Vietnam Bank for Agriculture and Rural Development, as SCB’s new chairman.

Vietnam’s General Secretary Nguyen Phu Trong has ordered officials to wrap up investigations into major cases, including that of Van Thinh Phat, by year end, according to the government’s website. BLOOMBERG, REUTERS