Good morning from weirdly scorching Ho Chi Minh City, where the wet season is almost nowhere to be seen. Welcome to the latest edition of the Vietnam Weekly. To new readers: everyone gets the same opening section of the newsletter, but only paying subscribers get access to the whole thing.
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The Diamond Smuggling Case Widens
The international diamond smuggling investigation mentioned here two weeks ago has expanded in scope, with another major jewelry company now embroiled.
This week, police in Thanh Hóa Province prosecuted four people for smuggling diamonds, including the head of the business department at state-owned SJC (Saigon Jewerly Company), one of Vietnam’s largest jewelry businesses.
Investigators believe that over 3,400 smuggled diamonds reached SJC’s retail network, with the suspects entering these items into the company’s system as if they had been repurchased from individual customers.
At one point, this scheme also involved Lê Thúy Hằng, the former SJC general director currently serving a 25-year prison sentence for embezzlement and abuse of power related to the illegal production and sale of bullion intended for the state-run gold stabilization fund.
Earlier this month, police in the same province detained 22 people for smuggling and trading diamonds illegally imported from Hong Kong and originally sourced from India. This included the former head of P-Lab, the certification subsidiary of the publicly listed jewelry giant Phu Nhuan Jewelery (PNJ).
The ring allegedly brought over 28,000 diamonds worth tens of millions of dollars into Vietnam through 141 separate smuggling trips since 2024. The diamonds were hidden in shoes and luggage, raising questions over how this went undetected for so long.
After PNJ’s stock crashed, the corporation’s chairwoman told investors that no smuggled diamonds had entered its retail supply chain. That is increasingly difficult to believe given the more recent SJC news above.
While domestic media has not directly linked the SJC and PNJ cases, the implication appears to be that all of the individuals detained so far were part of the same transnational smuggling ring.
Police have seized over 1,000 diamonds through raids at various properties and businesses, while many diamond stores across the country, including here in HCMC, have temporarily closed.
According to Nikkei Asia, many consumers are now concerned that the diamonds they own may not be authentic, while some stores are giving people who want to sell their diamonds back the run-around.
More developments in these cases can be expected, and the sheer scale of this operation makes one wonder who else was involved and whether other high-end products are sourced through similar schemes.
Additionally, in what appears to be a separate incident, an Indian national will go on trial in HCMC next week for smuggling about 1,500 diamonds into Vietnam across five trips in 2023 and 2024. After arriving in HCMC on the fifth journey, he was arrested at Tân Sơn Nhất International Airport with 715 diamonds hidden in his clothing.
The rest of today’s edition, for paid subscribers:
- Chips. Vietnam will name semiconductors a “key industry,” and HCMC may subsidize domestic chip design firms. But those firms barely exist, while foreign companies dominate.
- Crime Corner: 49 arrested over vapes laced with a surgical sedative, a bribes-for-criminal-records scheme inside HCMC’s own department, and 40 Vietnamese detained in Laos over a VNeID scam.
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