Saigon Jewelry Company (SJC) is a 100% state-owned gold trading enterprise, under the Ho Chi Minh City People's Committee, operating in this field for more than 35 years, with a network of more than 200 stores and dozens of official agents. Of which, dozens of stores are licensed to trade SJC gold bars.

SJC has been chosen by the State Bank of Vietnam (SBV) as the national gold brand since 2012. SJC produces gold bars under this brand and is responsible for the quality of SJC gold bars.

According to the initial investigation results, “the defendants took advantage of the gold price stabilization business to create fake documents and books to make illegal profits”. Up to now, the Investigation Police Agency is urgently consolidating documents and evidence against the defendants, at the same time expanding the case, and thoroughly recovering assets for the State.

The giant gold monopoly SJC: Huge revenue, thin profit

SJC has huge annual revenue but very low profit. In terms of market share, SJC is always the leader in revenue, especially in the gold bar segment.

According to the audited financial report, in 2023, SJC recorded revenue of more than VND 28.4 trillion (equivalent to more than USD 1.1 billion) but after-tax profit only reached nearly VND 61 billion. Cost of goods sold accounted for almost all revenue, reaching nearly VND 28.2 trillion.

Thus, it is likely that the input material price is recorded at a very high level, even though at many times in the first 4 months of the year, the price of SJC gold bars was much higher than the converted world gold price, often differing by over 10 million VND/tael, sometimes up to 18 million VND/tael.

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SJC national brand gold bars. Photo: MH

The situation of huge revenue but shrinking profit has been going on for many years at SJC. In 2022, SJC recorded revenue of nearly 27,200 billion VND, but profit after tax was nearly 49.2 billion VND.

In 2021, revenue was nearly 17,700 billion VND, profit reached 43.3 billion VND. In 2020, it was 23,500 billion VND and profit was nearly 55.8 billion VND. In 2019, revenue was 18,600 billion VND, profit was only 52.5 billion VND. In 2018, SJC had revenue of 20,900 billion VND, profit of 27.8 billion VND. In 2017, revenue was 22,900 billion VND, profit of 81.3 billion VND...

SJC also recorded large inventories. By the end of 2023, inventories (mainly gold) reached VND1,446 billion, very large compared to total assets of VND1,898 billion.

Surprisingly, SJC's profit is much thinner than other companies in the same industry. In 2023, PNJ recorded net revenue of more than VND 33,100 billion, but gross profit reached VND 6,058 billion, profit after tax reached more than VND 1,971 billion. In 2022, PNJ also had a net profit of more than VND 1,810 billion. In the first 9 months of 2024, PNJ recorded net revenue of nearly VND 29,200 billion and profit after tax of VND 1,382 billion.

In 2023, Doji Gold and Gemstone Group Joint Stock Company of tycoon Do Minh Phu recorded a profit after tax of more than 491 billion VND, equivalent to about 1.3 billion VND/day, down about 50% compared to 1,017 billion VND in 2022 and nearly 240 billion VND in 2021. In 2019 and 2020, Doji's profit after tax was 150 billion VND and 187 billion VND, respectively.

It can be seen that, despite having many advantages, especially the monopoly of SJC gold bars, SJC's business results are not impressive.

Since the end of 2023, the price of gold in the world, SJC gold bars, gold rings, and domestic gold jewelry have continuously increased sharply to new peaks. In May, the price of SJC gold bars reached 92.5 million VND/tael. The price of gold bars and rings in late October and early November skyrocketed, sometimes reaching nearly 90 million VND/tael, but was only about 4-5 million VND/tael higher than the converted world price.

According to the report by the end of 2023, Mr. Tran Van Tinh is the Chairman (appointed since November 2019), Ms. Le Thuy Hang is the General Director (also appointed since November 2019), Mr. Tran Hien Phuc is the Chief Accountant (since May 2023). The auditing company for SJC recently is A&C Auditing and Consulting Company Limited.

SJC participates in stabilizing SJC gold bars

From June 3, SJC was selected by the State Bank along with 4 state-owned commercial banks (including Agribank, BIDV, Vietcombank and Vietinbank) to participate in buying gold from the State Bank to sell directly to people, after the State Bank stopped bidding for gold bars since the end of May.

The goal is to reduce the difference between the price of SJC gold bars and the converted world gold price. As of October 29, the State Bank has supplied 11.46 tons of gold to the market through these 5 units.

Previously, through 9 auctions (including 3 unsuccessful ones) starting from April 22, the gold price difference did not decrease as expected. In total, more than 1.8 tons of gold were supplied through auctions.

In the first half of the year, the difference between domestic and international gold prices at times reached VND18 million/tael (in May). Some National Assembly deputies said that the large difference in gold prices led to complicated gold smuggling, causing a "bleeding" of foreign currency, potentially negatively affecting macroeconomic stability.

Explaining the opinions of delegates, on the afternoon of May 29, Governor of the State Bank of Vietnam Nguyen Thi Hong said that the Government and the Prime Minister are very interested and have given many strong instructions to the State Bank of Vietnam and ministries to narrow the gap between domestic and international gold prices. The State Bank of Vietnam has implemented measures to increase gold supply to the market through bidding, but the price gap has not decreased as expected.

The State Bank stopped bidding and then switched to selling directly to people through the above 5 organizations, including SJC.

Along with the above measures, the authorities also implemented transparency in gold transactions on the market. The State Bank of Vietnam has decided to establish an interdisciplinary inspection team to inspect all aspects from invoices, documents, and anti-money laundering transactions related to gold transactions to see if there are any violations of the law to speculate, hoard, and push up prices.

The case at SJC arose from taking advantage of gold trading to stabilize prices.

Selling exclusive gold bars at high prices, the giant SJC has surprisingly modest profits . SJC is the exclusive enterprise producing SJC gold bars. This brand has a selling price 10-18 million VND/tael higher depending on the time compared to other brands. However, this exclusive gold giant has unimpressive business results.