Times Square in Ho Chi Minh City
Hong Kong investor Eric Chu Nap-kee saw the $819 million sale of his Nexxus Building in the city’s Central district rank as Asia Pacific’s second-biggest real estate asset sale of 2023, but he will struggle to enjoy that victory as he goes on trial for fraud in Ho Chi Minh City on Tuesday.
The investor known in Hong Kong as Vietnamese Chu will be on the stand alongside his wife, Truong My Lan, the alleged mastermind of a $12 billion embezzlement scheme said to be the country’s largest-ever corruption case. The pair are the highest profile among 86 defendants set to be tried in the Ho Chi Minh City People’s Court, according to local media accounts.
According to an indictment by Vietnam’s Supreme People’s Procuracy in December, Eric Chu violated banking regulations at his wife’s direction, while serving in his role as chairman of the board of Times Square Vietnam Joint Stock Company. Chu was also listed as the largest shareholder in the company which controls the Times Square mixed-use complex in Ho Chi Minh City’s District One.
The trial is scheduled to be held through 29 April with Chu and Truong said to have been transferred to facilities on the outskirts of Ho Chi Minh City last month after having been held in prison camps in northern Vietnam. Truong was arrested in her luxury penthouse in October 2022 while Chu’s arrest was first mentioned in Vietnam’s local press in November of last year.
Six Tons of Evidence
Chu’s alleged involvement in the case includes using assets owned by his Times Square Investment Joint Stock Company – which includes the 39-storey Times Square residential, hospitality and office tower located in Ho Chi Minh City – as collateral for fraudulent loans disbursed by Truong-controlled Saigon Commercial Bank (SCB).
Eric Chu Nap Kee will soon be facing a less festive audience
A former cosmetics seller who at one point was ranked as Vietnam’s richest woman, Truong has been charged with having used a network of accomplices to falsify loan documents which reaped VND 304 trillion in funds from SCB. The scam is alleged to have cost the lender VND 129 trillion in losses from February 2018 through October 2022, when Truong was arrested.
Truong, who had acquired three lenders in 2011 and merged them into SCB, is accused of using the lender, along with a network of over 1,000 shadow companies, to fund her property development company, Van Thinh Phat. Truong could face a sentence of 20 years to life in prison or the death penalty if convicted.
Other defendants in the trial include 45 executives and officers of SCB, 15 former central bank officials; 3 former government inspectorate officers, and a former state audit officer, according to local media accounts. The list also includes five fugitive former SCB leaders who will be tried in absentia.
The scale of the fraud has also seen the court summon an additional 2,400 people connected to the case, while the defendants’ nearly 200 lawyers, including five who are defending Truong, are set to examine six tons of documents as evidence related to the case.
Fire Sales
With Truong’s alleged embezzlement roughly equivalent to 11 percent of Vietnam’s 2022 GDP, authorities in the Southeast Asian nation have begun tracking the entrepreneur-turned-detainee’s ill-gotten cash, while Truong’s family, businesses and associates have been rushing to dispose of properties in Vietnam and abroad.
Following Truong’s arrest, Chu, who once was estimated to own over HK$16 billion in properties in Hong Kong, undertook a fire sale which included offloading the Nexxus Building to entities linked to Taiwanese tech tycoon Steve Chang at a reported 30 percent to 35 percent discount to the grade A office building’s peak valuation in 2018.
Also in 2023 Chu sold a 132-key hotel in the Tin Hau neighbourhood, a house in the prestigious Peak area, and a Quarry Bay commercial and residential site. Those properties were sold at discounts ranging from 36 to 41 percent from the prices Chu had paid to acquire the assets.
Chu’s remaining properties in Hong Kong include The Wellington office tower on Sheung Wan’s Wellington Street, which he acquired in 2017 for HK$3 billion, as well as multiple luxury residences in the Peak and Mid-Levels areas said to have a combined value exceeding HK$2 billion.
The couple’s oldest daughter, Elizabeth Chu Duyet Hang, was listed as director of the private company which sold the Nexxus Building last year and was named one of Hong Kong’s “40 Under 40” by Prestige magazine in 2022 after successfully inheriting ZS Hospitality Group from her parents in 2017. The restaurant boss noted in an interview at the time of the award that, “Witnessing the success of my entrepreneurial parents, who built businesses from scratch, have really inspired me. My mum, in particular, has even ventured into the male-dominated world of real estate in Vietnam.”
Elizabeth Chu, whose group operates Testina, Whey, Hansik Goo, Plaa and other restaurants in Hong Kong, has been sharing her opinions with journalists covering the city’s dining scene as recently as January.
While the younger Chu entertains in Hong Kong, the family’s asset sales have reached into Southeast Asia’s wealthiest city, where Singapore-based Viva Land, which is affiliated with Truong’s Van Thinh Phat Group, agreed in November 2023 to sell the Hotel Telegraph along Singapore’s Robinson Road for around S$170 million to S$180 million ($125 to $133 million), with the company incurring an estimated S$70 million loss on the disposal after paying a record S$240 million for the 134-key property in 2022.
Viva Land, which shared management with a Ho Chi Minh City company named Viva Land which was controlled by Truong My Lan, sold 39 Robinson Road, an office block adjacent to the Hotel Telegraph, for S$399 million in March of last year, suffering a 20 percent haircut on that deal.
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