Diamond market turmoil forces around 30 Ho Chi Minh City businesses to suspend operations

Nguyen Van Dung, chairman of the Saigon Jewelry Association (SJA), told Tuoi Tre (Youth) online newspaper on Sunday that the gold, silver and gemstone market is undergoing a tough shakeout, adding that only businesses that operate transparently and protect customers' interests will be able to survive.

The closures came after authorities initiated criminal proceedings against the owners of several jewelry stores, including Kim Ly, Ngoc Tam, and Ngoc Chau Au, on July 14.

Le Thanh Ton Street in Saigon Ward, Ho Chi Minh City, once a bustling hub for gold, silver, and diamond businesses, now has numerous closed stores, some without any notice.

In some cases, businesses have returned their premises and landlords have put up 'for lease' signs.

An Duong Vuong Street in An Dong Ward and Tran Hung Dao Street in Cho Quan Ward, which are home to numerous major diamond stores, have also become noticeably quiet compared with their previously bustling atmosphere.

Before criminal proceedings were initiated against the company’s owner, Ngoc Chau Au had announced that it would suspend operations for two weeks, from July 11 to 24, to upgrade its system.

The company said it would record and address issues arising during that period from July 25. However, the store remains closed, with no further announcement posted on its Facebook page.

Diamond businesses said market confidence has been affected by cases in which customers were previously given appointments for buybacks but later found that businesses had suspended operations.

As a result, many customers have changed their minds and now want their diamonds handled immediately rather than waiting for several months.

This has left some stores overwhelmed and unable to keep up with phone calls or messages, putting considerable pressure on their staff.

Some businesses have stopped operations and are moving toward bankruptcy or dissolution. One such case is PJA Diamond Jewelry Co. Ltd. on Vo Van Tan Street in Ban Co Ward.

The company said the recent crisis in the diamond industry had caused unpredictable consequences, with the number of customers seeking to sell their products surging daily beyond its ability to manage the situation and causing severe cash flow bottlenecks.

Central bank urges caution over gold, diamond transactions

Tran Thi Ngoc Lien, deputy director of the State Bank of Vietnam's Region 2 branch, has urged the public to stay calm and carefully consider any decisions to buy or sell gold and diamonds after a series of recent criminal cases involving the diamond sector affected public confidence in the market.

She advised consumers to trade with licensed businesses that provide complete invoices and other relevant documents, and to retain warranty cards and certification documents.

Buyers should also carefully check a business's buyback policy before making a transaction and promptly report suspected violations to market surveillance authorities or even police officers, Lien said.

"Investigating and verifying violations and determining the responsibilities of relevant organizations and individuals fall under the jurisdiction of law enforcement agencies," Lien said.

Therefore, consumers and businesses should make informed assessments based on official and reliable information, she said.

Individual cases involving certain people or organizations should not be generalized to the entire gold and jewelry manufacturing and trading sector, as many businesses continue to operate legally and are subject to licensing, management, and regular inspections by multiple state agencies, Lien added.

For businesses involved in the manufacture and trading of gold jewelry and handicrafts, Lien stressed the need to strictly comply with regulations on invoices and documents and to publicly and transparently disclose their sales and buyback policies.

Businesses should also proactively provide information to customers and cooperate with authorities by supplying information when required by law, she said.

The State Bank of Vietnam's Region 2 branch will continue to closely monitor market developments and the operations of businesses under its management, while assessing emerging impacts and proposing appropriate management measures, Lien said.

The branch will also coordinate closely with relevant authorities to help ensure that the local gold and jewelry market operates in a stable manner and in compliance with the law.

The gold and diamond markets have seen sharp fluctuations following a series of criminal proceedings.

Consumer sentiment was further affected from July 21, when PNJ introduced daily payment limits on diamond and gold buybacks.

Instead of paying customers in full on the same day, as it had previously done, the company said it would make payments within 120 days in five installments.

On July 22, police in Thanh Hoa Province, northern Vietnam initiated criminal proceedings against four suspects for alleged smuggling and seized an additional 354 diamonds worth nearly VND69 billion (US$2.6 million).

Investigators determined that from 2022 to 2024, Le Thuy Hang, while serving as general director of Saigon Jewelry Co. Ltd. (SJC), directed Pham Thi Hong Duyen, the company's sales department head, to arrange the purchase of smuggled diamonds from Hong Kong and their illegal transportation into Vietnam for sale through SJC's retail store network.

The case has caused concern among consumers.

SJC issued a statement last weekend saying it would continue to apply its existing gold buyback policy at its store at 418-420 Nguyen Thi Minh Khai Street in Ban Co Ward, Ho Chi Minh City.

For individually priced jewelry and diamonds, SJC said buybacks would take longer because of complicated inspection procedures.

Customers seeking to sell diamonds they previously purchased from SJC are given appointments for specific dates because diamond buybacks take more time than gold transactions.

SJC said it had reassigned employees from other stores to support the diamond counter and speed up processing.

When customers arrive to sell diamonds, they wait for SJC staff to inspect the products for scratches and assess their quality. The center stone is then removed from the setting for a more detailed examination.

The next step is to determine the price. If the customer agrees to the quoted price, the transaction proceeds to accounting procedures.

Customers may receive payment on the same day if the transaction is completed promptly.

For customers living far away, some stores accept the diamonds and send them to the company's headquarters for further processing, which takes longer.