Vietnam jeweller rattled by ex-official’s arrest over India-Hong Kong gem-smuggling ring
Phu Nhuan Jewellery (PNJ) in Vietnam is facing a crisis of confidence after the former head of its gem certification unit was arrested for involvement in a diamond-smuggling ring. The ring allegedly smuggled diamonds from India to Vietnam via Hong Kong, leading to a significant drop in PNJ's share price.
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Corporate governance scandals in emerging markets can lead to rapid capital flight and long-term damage to brand reputation and investor trust.
Phu Nhuan Jewellery, Vietnam’s largest listed jeweller, is facing a crisis of confidence after police detained the former head of its gem certification subsidiary over his alleged links to a transnational diamond-smuggling ring.
Shares in PNJ, as the company is known, have plummeted more than 25 per cent since news of the investigation broke in early July.
Police accuse Dang Ngoc Thao, the former director of wholly owned unit PNJ Laboratory, of involvement in a criminal network that allegedly smuggled diamonds from India to Vietnam via Hong Kong, according to a Ministry of Public Security statement.
PNJ has said the allegations relate to Thao, not the company, adding that no smuggled diamonds entered its retail network and it is fully cooperating with authorities.
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