Phu Nhuan Jewelry JSC (PNJ) has been cleared of wrongdoing in its diamond import and distribution operations by Thanh Hoa police, according to preliminary findings of a cross-border smuggling probe. The police statement indicated PNJ had "complete import documentation" and its distribution process was "strictly controlled and fully compliant" with regulations. This news caused PNJ's stock to surge by the daily limit of 7% in Hanoi, reaching its highest close in a month, though the stock had previously plummeted around 37% since the investigation began in early July.
While PNJ itself was cleared, two employees of its wholly-owned gem certification unit, PNJ Laboratory Co. (P-Lab), remain accused. Dang Ngoc Thao, former director of P-Lab, and P-Lab employee Tran Tien Nhu Nghi, are alleged to have colluded with Indian nationals to smuggle diamonds from Hong Kong into Vietnam for personal profit. Thao is accused of buying illicit gemstones, removing their Gemological Institute of America (GIA) laser inscriptions, re-engraving them with P-Lab identification codes, and issuing new certifications to sell them for profit. The smuggled diamonds reportedly did not enter PNJ's retail system, with proceeds going directly to Thao.
The broader investigation into Vietnam's diamond sector has significantly impacted consumer confidence. Police allege over 30,000 stones, worth more than 1.5 trillion dong ($57 million), were smuggled into the country over two years. This has led to the temporary closure of dozens of diamond shops and calls for tougher industry regulation, with a month-long trade ministry-led inspection focusing on product origin and labeling set for August. Several prominent jewelers, including Saigon Jewelry Co. (SJC), have also faced pressure, and consumer trust remains a major concern, as many view diamonds as a store of wealth.
Analysts at SSI Securities Corporation noted that PNJ's short-term liquidity and business operations appear manageable, but highlighted greater risks to consumer confidence, brand reputation, and corporate governance. Diamond products, including loose diamonds and diamond jewelry, account for 33% of PNJ's jewelry sales. While PNJ insists the allegations relate to individuals and not the company, the incident has been termed a "crisis moment for the entire industry" by PNJ CEO Phan Quoc Cong, who stated the company is working to restore credibility, including potentially hiring international firms to assess its diamond inventory.
This incident underscores the challenges in Vietnam's diamond market, which imported over $122 million in diamonds during the first half of 2026. The alleged smuggling involved diamonds being sold at about one-third below prevailing market prices, with transactions arranged via encrypted messaging apps and payments settled using unique dollar banknote serial numbers. The investigation is ongoing, with authorities expanding the probe and reviewing individuals linked to the case.
