MoIT request for criminal investigation of Khaisilk scandal

The ministry on December 12 announced that it had completed product quality check-ups and inspection on some silk items of Khai Duc Company Limited – the owner of the Khaisilk brand.

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

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

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

The company also showed some signs of withholding information or providing inadequate and exact 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 stopped importing fashion products from the two countries since 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 a huge difference between the company’s accounting data and 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.

Minister of Industry and Trade Tran Tuan Anh, at the end of October, signed a decision to establish an inspection team to discover violations at the company following the trade fraud of its scandal 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 Hà Nội posted on Facebook to complain about products it had bought from the brand saying they were actually made in China.

According to the post, the company 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 of its fashion products.