Vietnamese jeweler PNJ comes under pressure after ex-subsidiary chief charged in transnational diamond smuggling case

Shares of PNJ fell the daily limit of 6.97 percent to VND58,700 (US$2.23) on Friday morning after authorities identified Dang Ngoc Thao, former director of wholly owned subsidiary P-Lab, among 22 people charged in the investigation. 

By about 9:30 am, more than 9.5 million shares were offered for sale at the floor price with no matching buy orders.

On Thursday, police in the north-central Vietnamese province of Thanh Hoa said they had dismantled a transnational diamond smuggling ring that allegedly imported more than 28,000 diamonds into Vietnam in 141 shipments since 2024, generating an estimated VND280 billion ($10.65 million) in revenue. 

Authorities seized about 1,100 diamonds during searches of 20 locations and said the investigation was continuing.

Police alleged the network was directed by an Indian national based in Hong Kong, with diamonds sourced in India, consolidated in Hong Kong, and smuggled into Vietnam for distribution nationwide.

Investigators said Thao, 52, colluded with other suspects to purchase smuggled diamonds whose characteristics did not match their original Gemological Institute of America (GIA) certificates.

Police alleged he removed the engraved GIA identification numbers, replaced them with P-Lab identification numbers, and issued new P-Lab grading certificates before the diamonds were sold for profit.

Gem certification is critical to determining a diamond's commercial value and consumer confidence, with independent certification companies not permitted to trade products they certify.

PNJ said the investigation concerned Thao in his personal capacity and that the company respected the legal process without commenting beyond information released by authorities.

The company said it had appointed new management at P-Lab to ensure certification operations continued normally and would fully cooperate with investigators if requested.

PNJ chairwoman Cao Thi Ngoc Dung said the company was surprised by the allegations and apologized to customers and investors for the impact on confidence.

"We believe any violations of the law, if proven, must be handled strictly," Dung said.

She said PNJ would support customers wishing to have diamonds previously purchased from the company re-certified, adding that P-Lab retained records of certified products to allow verification of technical specifications.

Dung also said PNJ's existing after-sales and buyback policies would remain unchanged.

P-Lab, established in 2010 and wholly owned by PNJ, previously said it accounted for about 70 percent of Vietnam's diamond and gemstone certification market and processed more than 10,000 certification requests each month.

Police said all 22 defendants have been charged over alleged roles including smuggling and trading illegally imported diamonds, and that the investigation is being expanded.