Phu Nhuan Jewelry JSC,?Vietnam¡¯s largest listed jeweler, 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% since news of the investigation broke in early July. Police accuse Dang Ngoc Thao, the former director of wholly owned unit PNJ Laboratory Co. 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. Still, the incident has rattled investors. A group of funds managed by VinaCapital have reduced stakes in PNJ and are no longer major shareholders, according to an exchange filing.
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