Smuggling Scandal: Jeweler Predicts Huge Loss amid Rush for Buybacks
October 01, 26
(IDEX Online) - Vietnam's largest listed jewelry retailer is forecasting a $241 million loss for 2026, after a diamond-smuggling scandal triggered a huge rush of buybacks.
PNJ (Phu Nhuan Jewelry), which has 430 stores across the country, now assumes that customers could eventually resell or exchange goods equivalent to 80% of products it has sold.
The crisis was triggered by dozens of arrests in June 2026 over the alleged smuggling of an estimated 30,000 diamonds worth $57 million from India through Hong Kong.
Among those arrested was Dang Ngoc Thao, the former director of PNJ's laboratory.
Vietnamese authorities subsequently acknowledged the smuggled diamonds had not entered PNJ's retail network. PNJ has also denied that it sold smuggled stones and said its diamonds had official import documentation.
The arrests nevertheless sent customers to PNJ stores seeking to have diamonds checked, returned or exchanged.
The company bought back nearly 5 trillion dong ($192 million) of merchandise between July 1 and September 3 and recorded a loss of 1.446 trillion dong ($55 million) on those transactions.
PNJ is now bracing for a much larger wave of buybacks. It has increased its assumption for the proportion of goods that customers could eventually resell or exchange from 28.8% to 80%.
The new assumption is being used to calculate a 7.071 trillion dong ($271 million) provision for potential losses under PNJ's buyback and exchange policy.
PNJ had originally targeted net profit of 3.409 trillion dong ($131 million) for 2026. It made a record 2.829 trillion dong ($109 million) profit in 2025. Its revised forecast is now for a 6.271 trillion dong ($241 million) loss.
The criminal investigation is also continuing, but no court hearing or trial date has been publicly announced. Vietnamese authorities have said they are continuing to investigate the wider alleged smuggling network.
Pic shows a PNJ store.