PNJ Forms Special Supervisory Board for P-Lab After Diamond Smuggling Arrest

Overview

Phu Nhuan Jewelry (PNJ) announced on July 7 the formation of a special supervisory board for its subsidiary P-Lab after the director, Dang Ngoc Thao, was arrested for involvement in a transnational diamond smuggling ring involving 28,000 diamonds. PNJ has stated that the smuggled diamonds did not enter its distribution system and that its operations remain stable. The stock has fallen limit-down for three consecutive sessions.

Key Facts

• PNJ established a special supervisory board for P-Lab, including two independent board members, to enhance oversight of P-Lab’s management.
• Dang Ngoc Thao, director of P-Lab (a 100% owned subsidiary of PNJ), was prosecuted and detained for smuggling 28,000 diamonds.
• PNJ Chairwoman Cao Thi Ngoc Dung stated that PNJ only imports diamonds through official channels from suppliers in Thailand and Hong Kong, with full import documentation.
• Dung confirmed that P-Lab does not have a diamond trading function, and PNJ has no diamond purchase transactions with P-Lab.
• The smuggled diamonds did not enter PNJ’s distribution system, according to the company.
• PNJ’s stock closed at VND 50,800 on July 7, down 6.96%, with a trading volume of 994,200 shares and a sell-side order surplus of over 12.5 million shares.
• Cao Ngoc Duy, brother of the chairwoman, registered to buy 300,000 PNJ shares from July 10 to August 7, which would increase his stake from 2.64% to about 2.7%.

What Happened

On July 7, PNJ issued an extraordinary announcement regarding its wholly-owned subsidiary, P-Lab, following the arrest of its director, Dang Ngoc Thao, in connection with a transnational diamond smuggling case. The company stated that it has implemented measures to strengthen governance, control, and supervision over P-Lab. The board of directors established a special supervisory board comprising two independent board members to monitor P-Lab’s management activities.

At a meeting with institutional investors on July 6, Chairwoman Cao Thi Ngoc Dung emphasized that PNJ had no involvement with the 28,000 smuggled diamonds. She clarified that PNJ imports diamonds only through official channels from suppliers in Thailand and Hong Kong, with full documentation. She also stated that P-Lab does not have a license to trade diamonds, PNJ has no diamond purchase transactions with P-Lab, and the smuggled diamonds did not enter PNJ’s distribution system.

Market Context

Following the announcement of the arrest on July 2, PNJ’s stock (HOSE: PNJ) fell limit-down for three consecutive sessions, closing at VND 50,800 on July 7, a decline of 6.96% on that day. The stock saw heavy selling pressure with over 12.5 million shares offered for sale at the close. The retail sector has been under scrutiny, and this incident has raised concerns about corporate governance and potential reputational damage for PNJ.

Strategic Significance

The formation of a special supervisory board with independent members signals PNJ’s commitment to strengthening internal controls and restoring investor confidence. The company’s swift response, including public statements and insider buying by the chairwoman’s brother, aims to mitigate the impact on its brand and operations. For long-term investors, the key question is whether PNJ’s core business—jewelry retail and official diamond imports—remains unaffected and whether the company can maintain its market position amid heightened regulatory and public scrutiny.

What to Watch

• Further developments in the legal case against Dang Ngoc Thao and any potential implications for PNJ.
• PNJ’s Q2 2026 earnings report to assess any financial impact from the incident, including changes in diamond inventory and customer behavior.
• Execution of the share buyback plan (up to 8 million shares) and insider purchases by Cao Ngoc Duy.
• Any regulatory actions by the State Securities Commission or other authorities regarding the incident.
• PNJ’s ability to maintain its dividend policy and growth trajectory in the retail sector.