Land compensation for Alibaba victims unlikely
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Victims of property firm Alibaba, which faces fraud accusations, are unlikely to get compensation in land since the projects it advertised were nonexistent, lawyers familiar with the case said.
Obtaining cash compensation would be time-consuming due to a large number of victims, they said.
The Ho Chi Minh City’s People’s Court has identified around VND1.6 trillion ($67.7 million) worth of assets related to allegedly fraudulent activities carried out by Alibaba leadership, namely the company of chairman Nguyen Thai Luyen and his wife Vo Thi Thanh Mai.
The couple have been accused of fraud and money laundering in relation to 58 property projects in three southern localities. The VND1.6 trillion in question was allegedly obtained by selling illegal and/or non-existent land projects to 4,000 alleged victims.
This VND1.6 trillion could be used to compensate the victims, said lawyer Truong Anh Tu, but he emphasized that the complex process of distributing the restitution to thousands of allegedly defrauded people – each with their own claims – would be complicated and extremely difficult to put into practice and complete.
Tu said that some victims are demanding they be compensated with land, meaning they still want to receive land that they bought from Alibaba as part of what were advertised and sold as residential development projects.
The problem is that Alibaba had no right to sell them the land in the first place. Even though the properties were sold as part of “residential development projects,” the land sold was actually zoned as agricultural land, a fact that can’t be overturned to compensate the alleged victims.
In Vietnam, agricultural land is eligible only for agriculture. It can’t be sold as anything else and nothing non-agricultural may be built on it without undergoing a long process of rezoning via the process of applying for approval with the government.
“The contracts that the victims signed are void because they bought into fake residential projects that were made up. They are not real,” Tu said.
“The couple have been accused of fraud and money laundering in relation to 58 property projects in three southern localities.”
However, many of those who bought land from Alibaba say they still want to use it for the residential development projects that were advertised to them.
But attorney Vo Dan Mach from Ta Pha Law Firm said the alleged victims can’t use the land they bought for residential development projects because the projects that Alibaba presented to them exist only on paper.
He added that another major problem is also that because the majority of accusers are actually seeking cash compensation, the VND1.6 trillion in assets simply won’t be enough to compensate all 4,000 of them.
“Figuring out a way to divide this figure for over 4,000 victims will be complicated,” he said.
Alibaba was established in 2016 by Luyen, who also formed 22 subsidiaries to invest in 58 residential projects in the southern provinces of Dong Nai, Ba Ria – Vung Tau and Binh Thuan.
Investigators have concluded that these projects were fake. On paper, each of the projects was attached to agricultural land ineligible for development. But Luyen and his staff advertised and sold them as residential development investments, all the while knowing that launching such developments on agricultural land would be impossible.
Luyen ordered his employees to illegally collect nearly VND2.4 trillion from 4,560 customers, of which investigators were able to contact 4,065 who had invested a total of VND2.1 trillion.
A ruling on the case is set to be announced Thursday.
Questions & Answers
Q.Why are victims unlikely to receive land as compensation?
Why are victims unlikely to receive land as compensation?
The projects Alibaba advertised were nonexistent, and the land sold was zoned as agricultural, making it unsuitable for residential development. This agricultural zoning cannot be overturned for compensation.
Q.What assets have been identified that could be used for compensation?
What assets have been identified that could be used for compensation?
The Ho Chi Minh City’s People’s Court has identified around VND1.6 trillion ($67.7 million) worth of assets linked to the alleged fraudulent activities. These assets were obtained by selling illegal or non-existent land projects.
Q.What is the primary challenge in distributing cash compensation to the victims?
What is the primary challenge in distributing cash compensation to the victims?
The main challenge is the complex process of dividing the identified assets among thousands of victims, each with individual claims. The VND1.6 trillion also may not be enough to compensate all 4,000 victims.
Q.Who founded Alibaba and what were they accused of?
Who founded Alibaba and what were they accused of?
Alibaba was established in 2016 by Nguyen Thai Luyen, who, along with his wife Vo Thi Thanh Mai, has been accused of fraud and money laundering. These charges relate to 58 property projects in three southern localities.
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