Khaisilk faces criminal probe on counterfeit silk products

Wednesday, 2017-12-13 08:57:49
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NDO/VNA - The Ministry of Industry and Trade (MOIT) has transferred documents relating to the Khaisilk scandal to the police for investigation after it discovered signs of criminal violations.

On December 12 the MOIT announced that it had completed product quality check-ups and inspections of some silk products from Khai Duc Company Limited – the owner of the Khaisilk brand.

The results of the inspection showed that there was no silk ingredients in some products, despite the label stating that the product was 100% silk.

“The company violated rules relating to fake and poor quality products,” the ministry said.

The MOIT said some products at the company were not labelled as required or had a lack of compulsory information.

The company also showed signs of withholding information or providing inadequate and inexact information to consumers, or selling items without a clear origin, MOIT added.

Statistics from the General Department of Customs showed that between 2006 and 2009, the Khai Duc Company Limited imported fashion products from China and Thailand. However, the company ceased importing fashion products from the two countries in 2009.

The company had not produced or outsourced fashion products at its production units in Vietnam. It instead bought them from shops, household businesses, and other firms in the market, labelling its brand “Khaisilk®”, “stylised Khaisilk” and “Khaisilk Made in Vietnam” to sell at stores nationwide.

Khaisilk was also found to be guilty of violations in taxes and invoices. Specifically, some of its invoices were illegal and not issued by tax agencies, while some had the wrong names of goods declared.

Inspectors discovered huge discrepancies between the company’s accounting data and the checked products at some of its branches. The company could not explain the reasons for the difference.

MOIT said that it would continue to clarify and resolve the violations under its management.

At the end of October, Minister of Industry and Trade Tran Tuan Anh, signed a memorandum to establish an inspection team to discover violations at the company following the trade fraud scandal of its selling made-in-China products.

In the beginning of November, Deputy Prime Minister Truong Hoa Binh instructed relevant agencies to clarify the violations in silk trading and report to the PM before December 15.

The Khaisilk crisis broke out in October when a business in Hanoi posted a complaint on Facebook about products it had bought from the brand saying they were actually made in China.

According to the post, the company had bought 60 Khaisilk-branded scarves at the Hang Gai shop in Hanoi for VND644,000 (US$28) each. However, one scarf had two tags, including “Khaisilk Made in Vietnam” and “Made in China.”

The company said it had checked the rest of the scarves and found signs that the “Made in China” tags had been removed.

Hoang Khai, Khaisilk Group’s chairman, later said that the scarves were actually imported from China. Khai apologised and offered compensation to customers.

The company operates in several sectors. However, the inspection team focused only on check-ups in production, outsourcing, and import-export trade of its fashion products.