The trial of Ngo Xuan Truong (50, former director of Dai Hai Investment JSC - the developer of Hiep Binh Chanh Residential Area project) and Luu Quang Lam (66, former chairman of Dai Hai's board of directors) for abusing trust to appropriate assets and fraud is currently under deliberation.
During the proceedings, the People's Court of Ho Chi Minh City summoned 3 banks as stakeholders, but none appeared.
The case directly impacts hundreds of residents in the Hiep Binh Chanh Residential Area. For over a decade, they have lived in constant worry as the land they purchased was mortgaged by the developer, jeopardizing their legal ownership. Many haven't received their land-use rights certificates despite having built homes years ago, hindering administrative procedures and even school enrollment for their children. Some borrowed money to buy the land, but their debt has multiplied due to the lack of certificates.
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Defendants Ngo Xuan Truong (front) and Luu Quang Lam (right, in white shirt, released on bail) at the trial. Photo: Binh Nguyen |
Defendants Ngo Xuan Truong (front) and Luu Quang Lam (right, in white shirt, released on bail) at the trial. Photo: Binh Nguyen
The Hiep Binh Chanh Residential Area project, covering nearly 58,000 m², was assigned to K&N Construction Investment Consulting Co., Ltd. (later renamed Dai Hai) in 2001. Two years later, the company partnered with a branch of Song Da Corporation (now ANI JSC) to subdivide and sell the land. The agreement granted Dai Hai 180 plots and Song Da 239 plots. These were subsequently sold to customers.
The indictment states that during business operations, Lam borrowed money and invested capital from several individuals. In 2012, as chairman and director of Dai Hai, Lam signed 7 mortgage and guarantee contracts for 6 other companies, totaling over 208 billion VND, despite knowing that the 115 plots within the Hiep Binh Chanh Residential Area project had already been sold to residents.
Specifically, on 21/5/2012, Lam used the general certificate (master title) of 22 plots totaling over 2,700 m² to secure a loan of over 31 billion VND from Vietcombank's Ho Chi Minh City branch for Thanh Uyen Company. Lam and associates repaid over 53 billion VND. As of 30/6/2024, Thanh Uyen still owed the bank over 27 billion VND in interest.
Three months later, he used the general certificate for 8 plots totaling over 2,500 m² as collateral with the same bank for a 35 billion VND loan to Song Hoa Company. As of 30/6/2024, Song Hoa owed the bank over 56 billion VND in outstanding and overdue interest.
From June to July 2012, Lam used 42 residential plots (covered by two master titles) to guarantee a 52 billion VND loan from Dong A Bank for Nha Thanh Pho Development Investment Trading JSC. As of 27/7/2024, the total outstanding debt was over 175 billion VND in principal and interest.
Also in 2012, Lam used the certificates of 24 other plots to guarantee a 75 billion VND loan from Agribank (Vietnam Bank for Agriculture and Rural Development) for two business associates. Their total outstanding debt at Agribank as of July 2024 was approximately over 100 billion VND.
In March 2012, Lam used 19 residential plots in Hiep Binh Chanh Residential Area to guarantee a 15 billion VND loan from Phuong Nam Bank (now Sacombank) for Binh Trung Tay Company. The bank confirmed full repayment with no outstanding debt or compensation claims.
| Vietcombank – Ho Chi Minh City Branch | 22 plots (2,700 m2) | 21/5/2012 | Thanh Uyen Company | >31 | ~27 interest owed |
| 8 plots (2,500 m2) | 8/2012 | Song Hoa Company | 35 | ~56 interest owed | |
| Total at Vietcombank | 30 plots | 2012 | 66 | ~83 interest owed | |
| Dong A Bank | 42 plots (2 master titles) | 6–7/2012 | Nha Thanh Pho Company | 52 | ~175 principal + interest |
| Agribank | 24 plots | 2012 | 2 related companies | 75 | ~100 |
| Phuong Nam Bank (now Sacombank) | 19 plots | 3/2012 | Binh Trung Tay Company | 15 | Fully repaid, no debt |
| Ngo Xuan Truong | 17 plots | After 2012 | Transferred/mortgaged to multiple creditors, some remortgaged with banks | ~10.7 | No specific outstanding debt listed |
During the investigation and trial, Lam admitted his wrongdoing. He stated that after the discovery, he and others repaid bank debts and exchanged other assets for the residents' certificates.
The banks have received payments and assets to offset the debts and have no further claims related to the loans Lam guaranteed. Dong A Bank filed a complaint against Lam for asset appropriation of the original 52 billion VND loan.
Regarding the alleged appropriation from Dong A Bank, Lam claimed to have prepared funds and assets for repayment and exchange. However, due to changes in the bank's management, this has been delayed.
In addition to Lam's actions, Ngo Xuan Truong, while director of Dai Hai, is accused of using the same sold plots to settle his debts.
The indictment states Truong borrowed over 36 billion VND from various individuals. Unable to repay, he mortgaged and transferred 17 plots (worth over 10.7 billion VND), already sold to customers, to creditors. These plots were further transferred, some even remortgaged with banks by subsequent buyers.
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Victims and related parties observe the trial. Photo: Hai Duyen |
Victims and related parties observe the trial. Photo: Hai Duyen
Banks overlooked on-site due diligence
Regarding the banks' acceptance of 115 residential plots as collateral from Truong and Lam, Ho Chi Minh City police identified "signs of violation in lending activities." The investigation has separated this aspect for further review after the State Bank provides an assessment of the lending, mortgage, and authorization processes.
At the trial, both the defense and victims' lawyers argued that banks neglected on-site due diligence during the credit agreements. They failed to conduct proper on-site assessments to verify the properties' status, thus overlooking the unauthorized mortgaging of properties not owned by the defendants.
According to lawyer Nguyen Thi Kieu Anh, representing the victims, the banks bear partial responsibility. "If the banks had conducted on-site appraisals, this case might not have happened," she stated, requesting the court to invalidate the mortgage, credit, and guarantee contracts between the individuals, organizations, and the banks.
Furthermore, she requested validation of the transfer and investment contracts between the residents and the developer, allowing them to contact authorities to establish their land-use rights and property ownership.
The People's Procuracy of Ho Chi Minh City recommended a life sentence for Lam and 16-18 years for Truong.
Regarding civil liabilities, the procuracy requested the court to order the defendants to repay the banks, invalidate related contracts and transactions, and have the banks return the land-use right certificates to the residents for processing.
The court will deliver its verdict on 27/8.
Hai Duyen
