Khanh Vu, written by Francesco Guarascio
HANOI (Reuters) – Vietnam’s top leader has called for an anti-corruption campaign that has had a chilling effect on the economy after police uncovered a financial scandal in the real estate industry that accounted for more than 3% of the country’s total value. He vowed to extend it “in the long term.” Domestic product.
The anti-corruption movement began in 2016 but gained momentum last year after authorities in the communist-ruled country cracked down on several high-profile fraud and corruption cases involving top companies and state officials. Increased.
“We need to carry out the fight against corruption more efficiently and faster,” Communist Party General Secretary Nguyen Phu Trong said on Wednesday, state media reported later in the day.
“We will not stop here, we will continue for the long term,” he said.
Chong’s comments came after police released the results of a months-long investigation into two financial scandals, revealing for the first time the scale of the fraud, totaling $12.8 billion, or 3.2% of the economy. .
According to the investigation, the biggest of the two scandals involved Truong My Lan, chairman of the real estate developer Van Tinh Phat Holdings Group, and his accomplices withholding VND304 trillion from the Saigon Joint Stock Commercial Bank. 12.54 billion), the findings of which were published on Sunday.
The case, which was widely publicized when Mi Lan was arrested last October, sparked a crisis in the real estate industry and corporate bond market, where he was accused of illegally issuing large amounts of corporate bonds.
The intensification of the anti-corruption campaign, known as the “burning furnace” and reminiscent of campaigns in neighboring China, will exacerbate the negative economic impact of the scandal, as authorities fear it will be dragged into investigations. , is seen as paralyzing many daily transactions.
The scale of the fraud was not revealed until this week, raising concerns among financial experts about the impact on the banking sector.
JPMorgan Research said large-scale scandals could lead to stricter enforcement of financial rules, which could slow growth while raising costs for lenders.
In September, the Asian Development Bank warned that the crisis in the real estate sector could spill over into banking as the non-performing loan ratio rises.
On Wednesday, the rating agency jointly owned by Moody’s said Vietnam’s listed real estate developers face increasing pressure to repay huge debts as profits plummeted and cash reserves fell to the lowest level in more than five years. He said he is doing so.
In an unrelated scandal, police late Wednesday revealed that the chairman of real estate developer Tan Hoang Minh Group issued bonds to 6,600 investors worth VND8.6 trillion ($354.64 million). The scale of the scandal was revealed for the first time. Previously reported.
(Reporting by Khanh Vu and Francesco Guarascio; Editing by Robert Birsel)