Deposed South Korean president arrested, jailed after long saga

March 31, 2017

Seoul, Mar 31: South Korea's disgraced former President Park Geun-hye was arrested and jailed Friday over high-profile corruption allegations that have already ended her tumultuous four-year rule and prompted an election to find a successor. A convoy of vehicles, including a black sedan carrying Park, entered a detention facility near Seoul before dawn after the Seoul Central District Court granted a prosecutors' request to arrest her.

Many Park supporters waved national flags and shouted “president” as Park's car entered the facility. An opponent held up a mock congratulatory ribbon with flowers that read “Park Geun-hye, congratulations for entering prison. Come out as a human being after 30 years.”

Prosecutors can detain her for up to 20 days before formally charging her. The Seoul court's decision is yet another humiliating fall for Park, South Korea's first female president who was elected in 2012 amid overwhelming support from conservatives, who recall her dictator father as a hero who lifted the country from poverty in the 1960-70s despite a record of severe human rights abuses.

Prosecutors accuse Park of colluding with a confidante to extort big businesses, take a bribe from one of the companies and commit other wrongdoing. The allegations led millions of South Koreans to protest in the streets every weekend for months before lawmakers impeached her in December and the Constitutional Court ruled in March to formally remove her from office.

It made Park the country's first democratically elected leader to be forced from office since democracy came here in the late 1980s. South Korea will hold an election in May to choose Park's successor. Opinion surveys say liberal opposition leader Moon Jae-in, who lost the 2012 election to Park, is the favorite.

Prosecutors can charge Park without arresting her. But they said they wanted to arrest her because the allegations against her are “grave” and because other suspects involved the scandal, including her confidante Choi Soon-sil and Samsung heir Lee Jae-yong, have already been arrested. The Seoul court said it decided to approve Park's arrest because it believes key allegations against her were confirmed and there were worries that she may try to destroy evidence.

Park's conservative party described her arrest as “pitiful,” while the liberal politician favored in polls to succeed her said the country took a step toward restoring “justice and common sense.”

The camp of Moon Jae-in, who lost the 2012 presidential race to Park, said in a statement that the nation should now “turn the page on painful history” and focus on creating a fair and clean country.

A day earlier, Park was questioned at a court hearing for nearly nine hours. As she left for the hearing, hundreds of her supporters, many of them elderly citizens, gathered at her private Seoul home. They wept, chanted slogans and tried to block Park's car before being pushed back by police.

In the coming weeks, prosecutors are expected to formally charge Park with extortion, bribery and abuse of power. Her bribery conviction alone is punishable by the minimum 10 years in prison and the maximum life imprisonment in South Korea.

Prosecutors believe Park conspired with Choi and a top presidential adviser to bully 16 business groups, including Samsung, to donate 77.4 billion won ($69 million) for the launch of two nonprofits that Choi controlled. Company executives said they felt forced to donate in fear of retaliatory measures including state tax investigations.

Park and Choi are accused of separately receiving a bribe from Samsung and colluding with top officials to blacklist artists critical of Park's policies to deny them state financial assistance programs, according to prosecutors. Park also is alleged to have passed on state secrets to Choi via a presidential aide.

Park and Choi deny most of the allegations. Park has said she only let Choi edit some of her presidential speeches and got her help on “public relations” issues. Choi made similar statements. The women, both in their 60s, have been friends for 40 years. Park once described Choi as someone who helped her when she had “difficulties,” an apparent reference to her parents' assassinations in the 1970s.

Park's father, Chung-hee, was gunned down by his own intelligence chief in 1979, five years after his wife was killed in an assassination attempt that targeted him. Park Geun-hye served as first lady after her mother's death.

After her father's killing, Park Geun-hye left the presidential Blue House and secluded herself from the public eye before she entered politics in the late 1990s — when public nostalgia for her father emerged after the country's economy was hit hard by the Asian financial crisis. She had since become an icon of South Korean conservatives, earning the nickname “Queen of Elections” for her ability to led her conservative party to win tight elections.

Park now becomes South Korea's third head of state to be jailed after leaving office.

Former presidents Chun Doo-hwan and Roh Tae-woo, both previously army generals, received a life sentence and a 17-year prison term, respectively, in 1996 on charges including treason and bribery. They were released in December 1997 on a special presidential amnesty.

Chun and Roh staged a 1979 coup that put Chun in power more than eight years after Park Chung-hee's death. Roh was elected president in 1987 after Chun's government caved to massive pro-democracy protests and accepted direct, free elections. In 2009, prosecutors questioned former liberal President Roh Moo-hyun over corruption allegations, but they later closed the investigation after Roh leaped to his death.

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Vietnamese billionaire Truong My Lan sentenced to DEATH for $44bn fraud

News Network

April 11,2024

Real estate tycoon Truong My Lan was sentenced Thursday to death by a court in Ho Chi Minh city in southern Vietnam in the country's largest financial fraud case ever, state media Thanh Nien said.

It's a rare verdict - she is one of very few women in Vietnam to be sentenced to death for a white collar crime, i.e. looting one of the country's largest banks over a period of 11 years.

The decision is a reflection of the dizzying scale of the fraud. Truong My Lan was convicted of taking out $44bn (£35bn) in loans from the Saigon Commercial Bank. The verdict requires her to return $27bn, a sum prosecutors said may never be recovered. Some believe the death penalty is the court's way of trying to encourage her to return some of the missing billions.

The habitually secretive communist authorities were uncharacteristically forthright about this case, going into minute detail for the media. They said 2,700 people were summoned to testify, while 10 state prosecutors and around 200 lawyers were involved.

The evidence was in 104 boxes weighing a total of six tonnes. Eighty-five defendants were tried with Truong My Lan, who denied the charges.

"There has never been a show trial like this, I think, in the communist era," says David Brown, a retired US state department official with long experience in Vietnam. "There has certainly been nothing on this scale."

The trial was the most dramatic chapter so far in the "Blazing Furnaces" anti-corruption campaign led by the Communist Party Secretary-General, Nguyen Phu Trong.

A conservative ideologue steeped in Marxist theory, Nguyen Phu Trong believes that popular anger over untamed corruption poses an existential threat to the Communist Party's monopoly on power. He began the campaign in earnest in 2016 after out-manoeuvring the then pro-business prime minister to retain the top job in the party.

The campaign has seen two presidents and two deputy prime ministers forced to resign, and hundreds of officials disciplined or jailed. Now one of the country's richest women has joined their ranks.

Truong My Lan comes from a Sino-Vietnamese family in Ho Chi Minh City, formerly Saigon. It has long been the commercial engine of the Vietnamese economy, dating well back to its days as the anti-communist capital of South Vietnam, with a large, ethnic Chinese community.

She started as a market stall vendor, selling cosmetics with her mother, but began buying land and property after the Communist Party ushered in a period of economic reform, known as Doi Moi, in 1986. By the 1990s, she owned a large portfolio of hotels and restaurants.

Although Vietnam is best known outside the country for its fast-growing manufacturing sector, as an alternative supply chain to China, most wealthy Vietnamese made their money developing and speculating in property.

All land is officially state-owned. Getting access to it often relies on personal relationships with state officials. Corruption escalated as the economy grew, and became endemic.

By 2011, Truong My Lan was a well-known business figure in Ho Chi Minh City, and she was allowed to arrange the merger of three smaller, cash-strapped banks into a larger entity: Saigon Commercial Bank.

Vietnamese law prohibits any individual from holding more than 5% of the shares in any bank. But prosecutors say that through hundreds of shell companies and people acting as her proxies, Truong My Lan actually owned more than 90% of Saigon Commercial.

They accused her of using that power to appoint her own people as managers, and then ordering them to approve hundreds of loans to the network of shell companies she controlled.

The amounts taken out are staggering. Her loans made up 93% of all the bank's lending.

According to prosecutors, over a period of three years from February 2019, she ordered her driver to withdraw 108 trillion Vietnamese dong, more than $4bn (£2.3bn) in cash from the bank, and store it in her basement.

That much cash, even if all of it was in Vietnam's largest denomination banknotes, would weigh two tonnes.

She was also accused of bribing generously to ensure her loans were never scrutinised. One of those who was tried used to be a chief inspector at the central bank, who was accused of accepting a $5m bribe.

The mass of officially sanctioned publicity about the case channelled public anger over corruption against Truong My Lan, whose fatigued, unmade-up appearance in court was in stark contrast to the glamorous publicity photos people had seen of her in the past.

But questions are also being asked about why she was able to keep on with the alleged fraud for so long.

"I am puzzled," says Le Hong Hiep who runs the Vietnam Studies Programme at the ISEAS - Yusof Ishak Institute in Singapore.

"Because it wasn't a secret. It was well known in the market that Truong My Lan and her Van Thinh Phat group were using SCB as their own piggy bank to fund the mass acquisition of real estate in the most prime locations.

"It was obvious that she had to get the money from somewhere. But then it is such a common practice. SCB is not the only bank that is used like this. So perhaps the government lost sight because there are so many similar cases in the market."

David Brown believes she was protected by powerful figures who have dominated business and politics in Ho Chi Minh City for decades. And he sees a bigger factor in play in the way this trial is being run: a bid to reassert the authority of the Communist Party over the free-wheeling business culture of the south.

"What Nguyen Phu Trong and his allies in the party are trying to do is to regain control of Saigon, or at least stop it from slipping away.

"Up until 2016 the party in Hanoi pretty much let this Sino-Vietnamese mafia run the place. They would make all the right noises that local communist leaders are supposed to make, but at the same time they were milking the city for a substantial cut of the money that was being made down there."

At 79 years old, party chief Nguyen Phu Trong is in shaky health, and will almost certainly have to retire at the next Communist Party Congress in 2026, when new leaders will be chosen.

He has been one of the longest-serving and most consequential secretary-generals, restoring the authority of the party's conservative wing to a level not seen since the reforms of the 1980s. He clearly does not want to risk permitting enough openness to undermine the party's hold on political power.

But he is trapped in a contradiction. Under his leadership the party has set an ambitious goal of reaching rich country status by 2045, with a technology and knowledge-based economy. This is what is driving the ever-closer partnership with the United States.

Yet faster growth in Vietnam almost inevitably means more corruption. Fight corruption too much, and you risk extinguishing a lot of economic activity. Already there are complaints that bureaucracy has slowed down, as officials shy away from decisions which might implicate them in a corruption case.

"That's the paradox," says Le Hong Hiep. "Their growth model has been reliant on corrupt practices for so long. Corruption has been the grease that that kept the machinery working. If they stop the grease, things may not work any more."

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