PNJ, the only publicly traded firm among the four, faced immediate sell-offs on the Ho Chi Minh City stock exchange, highlighting investor concerns over compliance and transparency in the country’s volatile gold market.
Criminal Breach Allegations Spark Market Reaction
According to the SBV’s inspection, all four companies—SJC, DOJI, Bảo Tín Minh Châu, and PNJ—had systematically failed to implement key AML safeguards. The report cited critical lapses, including the absence of comprehensive internal AML policies, failure to classify clients by risk profile, lack of periodic risk evaluations, and no mechanisms to identify politically exposed persons (PEPs).
Moreover, the firms were found to have not filed reports on high-value transactions, neglected internal AML training and audits, and failed to retain adequate customer identification records. Internal controls were reportedly insufficient, with no clear assignment of responsibilities to dedicated AML officers.
In an official response, PNJ stated that it “consistently upholds compliance with state regulations” and “prioritises transparency in all aspects of its operations,” including accounting standards, invoicing, documentation, and tax obligations. The company also confirmed it had proactively called on relevant authorities to clarify ambiguities in the SBV’s findings, pledging full cooperation in any further investigations.
Riding the Gold Wave—A Profitable Gamble?
The audit follows growing scrutiny of PNJ’s financial performance during a period of extraordinary gold price volatility. In early 2024, the Vietnamese financial daily Đầu Tư Tài Chính questioned whether the firm had reaped speculative profits from bullion trading, particularly in the wake of gold prices breaching VND 60 million and subsequently VND 70 million per tael.
From 2017 to 2021, PNJ’s bullion revenue grew modestly by 20–30% annually. But in 2022, it spiked by over 70%—a deviation so sharp it raised eyebrows in the financial community. While the company’s board insisted that bullion margins remain low and contribute just around 1% to gross profit, some analysts argued that trading activity, rather than core jewellery sales, was behind the surge in earnings.
At the company’s 2024 annual general meeting, Chairwoman Cao Thị Ngọc Dung acknowledged the operational pressures brought on by soaring gold prices. “Raw material costs account for up to 50% of our total expenses,” she noted, adding that the firm had to “pause production intermittently” due to intraday price volatility. Her remarks underscored the challenges of managing inventory and input costs in an overheated gold market.
Yet industry observers suspect PNJ may have tactically exploited the market’s momentum. A financial expert cited in Vietnamese media pointed to a dramatic VND 1.43 trillion reduction in bullion inventory in Q1 2024—just before the audit. The decline, he argued, suggests the company offloaded reserves to capitalise on high prices, recording gains in what became a record-breaking quarter.
Leverage, Liquidity, and Lucrative Returns
Further analysis of PNJ’s Q4 2023 financials reveals a potentially more complex strategy. The company reportedly used VND 3.99 trillion worth of inventory as collateral for short-term loans. Simultaneously, it settled VND 2.02 trillion in debt—implying a possible pattern of borrowing against stored gold, selling into a rising market, and using profits to repay loans.
The expert estimated that this manoeuvre may have yielded nearly VND 600 billion in profit—an impressive return underpinned by PNJ’s access to preferential credit as a manufacturing enterprise. “This type of financial engineering, while not illegal per se, blurs the line between hedging and speculation,” he remarked.
Such assertions gain further weight when juxtaposed with PNJ’s performance following the SBV audit. According to the company’s Q1 2025 earnings report, net revenue declined by 23.5% year-on-year to VND 9.635 trillion, while post-tax profit fell by 8.1% to VND 678 billion. The downturn was attributed largely to a 65.8% plunge in 24K bullion revenue, which totalled just VND 1.744 trillion.
The sharp contraction reflected ongoing supply constraints and disruptions in sourcing raw materials—conditions that persisted through late 2024 during the central bank’s inspection. Market participants interpreted the drop-off as a signal that PNJ’s previous growth may have relied heavily on inventory liquidation strategies, no longer tenable under heightened regulatory scrutiny.
Investor response was swift and severe. On 2 June, the day the SBV's findings were made public, PNJ shares tumbled by as much as 7%, nearing the daily trading floor limit. The rout underscores the fragility of investor confidence in a sector that has long operated in regulatory grey areas, with limited oversight of inventory flows, pricing mechanisms, and AML protocols.
Analysts say the case highlights broader concerns around transparency and risk management in Vietnam’s gold trading ecosystem. While PNJ maintains its innocence and cooperation with authorities, its entanglement in the SBV’s probe may serve as a wake-up call for the industry to reinforce compliance practices and rethink speculative practices disguised as operational strategy.
