Khaisilk scandal: Brand to be investigated

A Khaisilk’s outlet in Ha Noi’s Hang Gai Street has been shut down after scandal. — Photo laodong.com.vn

Minister of Industry and Trade Tran Tuan Anh said relevant documents had been transferred to the police.

Anh, on Monday, chaired a meeting with relevant agencies on checks and ways to resolve violations by selling "Made-in-China" products under the Vietnamese trademark.

Polices will launch a criminal probe into Khaisilk after an inspection last week uncovered fake products that were made in China at one of the brand’s Ha Noi outlets on 113 Hang Gai Street, Hoan Kiem District.

In addition, a joint task force will be set up with the participation of police, customs, tax offices, the Viet Nam Textile and Apparel Association, and the Viet Nam Standards and Consumers Association, which will launch an independent probe into allegations against the brand.

It will also ask the People’s Committee of Ha Noi and HCM City to instruct relevant agencies to co-operate with the task force to clarify violations of Khaisilk Group, Khai Duc Joint Stock Company and its branch on 113 Hang Gai Street.

The Department of Market Watch will collect information related to the scandal.

The scandal came to light on October 23 when a business in Ha Noi posted on Facebook a complaint 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 in the Hang Gai shop in Ha Noi for VNĐ644,000 (US$28) each. However, one scarf had two tags - “Khaisilk Made in Việt Nam” and “Made in China.”

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

Group chairman Hoang Khai, the brand’s owner, later admitted in an interview with online newspaper zing.vn that half of the silk used by Khaisilk came from China, while the rest came from Vietnamese craft villages. However, he was adamant that his company always used high-quality material.

Khải shared that in the 1990s, Viet Nam’s silk artisan villages couldn’t produce enough raw material for his brand, so he had to begin sourcing it from China and selling items with a “Made in Viet Nam” tag.

The scandal may bring down the brand as local consumers are urging a complete boycott.

Khaisilk is a well-known high-end brand with a history of over 30 years, famous for its supposedly high-quality "Made in Viet Nam" products.

Earlier on the same day, chairman of HCM City Nguyen Thanh Phong also asked relevant agencies to clarify the violation which could affect tourism as Khaisilk has three shops in the city.

All Khaisilk shops in Ha Noi and HCM City have been shut down following the scandal.