Old is not gold: Vietnam top gold trader SJC halts buying pre-1996, dented bars

Customers have found recently that SJC stores no longer accept gold bars whose series number starts with only one letter. These were made before 1996, and since that year SJC started using two letters in the series numbers.

One customer went last week to an SJC store in HCMC’s District 3 to sell two bars, but was refused.

He says: “I only found out then that SJC has two types of gold bars. Mine was made in the old design but it was still an SJC product. Why are they making a distinction now?”

Others have been unable to sell their gold to SJC if the bar is deformed in any manner though it used to buy them.

An SJC employee who asked not be identified said her company has 1,000 taels (37.5 gm) it bought in the last two months still in inventory.

The State Bank of Vietnam (SBV) does not allow SJC to sell these bars in the market, fix dents in bars or remold them, she said.

This is why the company has stopped buying certain bullion and could only lift those restrictions when the SBV does so, she added.

Under a 2012 decree the government has monopoly in gold production. The SBV decides when and how much gold bullion should be produced and tasks SJC with the production.

An SJC executive, who asked not to be identified, said in the past, whenever it had 1,000 taels in inventory, the company would ask the central bank for permission to recast and sell them in the market.

But this year the central bank has not given permission to do so.

“We understand that this is unfair to customers, but SJC is not aware of what the central bank’s policies are and therefore it cannot buy bars which carry high risk.”

Tran Thanh Hai, chairman of SJC Phu Tho SJC, a SJC subsidiary, told VnExpress that gold bullion has always been made with the same material whether before or after 1996.

But customers think pre-1996 gold bars have less value, he added.

SJC CEO Le Thuy Hang said in May that all bullion molds are managed by the central bank and his company is only allowed to fix a limited number of deformed bars each year.

She also called on the government to relinquish its monopoly on gold production and allow businesses to import and make bullion.

SJC has stopped buying pre-1996 and dented bullion on several occasions in the past.