Ministry of Industry and Trade: Khaisilk scarves do not contain silk

After concluding that Khaisilk's silk scarves did not contain silk, the Ministry of Industry and Trade transferred the case to the police for investigation.

Results of testing and appraisal of textile product quality for some product samples ofKhai Duc Company Limited, the owner of the Khaisilk brand,shows that there is no silk ingredient as declared on the product label about the raw material ingredients in the product is 100% silk.

"This business has violated a series of signs related to marketing.n counterfeit goods, poor quality goods", the conclusion report of the Ministry of Industry and Trade stated.

With this result,The Ministry of Industry and Trade said it has transferred the case file and evidence to the police investigation agency for handling according to regulations for signs of criminal law violations. The Ministry is also monitoring, continuing to clarify and handle according to regulations for violations of enterprises under its authority.

The Ministry of Industry and Trade has directed functional units to transfer files and evidence of the Khaisilk case to the Investigation Police Agency.

In addition, Khaisilk also showed signs of violating the law on tax and invoice management. Specifically, some invoices presented by the company were invalid, not issued or managed by the Tax Department; others declared incorrect product names.

A large number of products differed between accounting voucher data and actual inspection data at a company branch, while the unit could not explain the cause or provide full invoices for these products.

The inspection team of the Ministry of Industry and Trade also said that during the inspection at Khaisilk, it was discovered that some products did not have labels as prescribed, or had labels but did not fully contain the required content.

This company also shows signs of concealing information or providing incomplete, false, or inaccurate information to consumers and selling many products of unknown origin.

Khaisilk’s crisis erupted in mid-October when a Facebook account said that the family company had ordered 60 silk scarves for VND644,000 each from Khaisilk store 113 Hang Gai (Hanoi) with a total order value of VND38.64 million. However, after receiving the goods, the company discovered that in the shipment there was a scarf with both the label “KHAISILK - Made in Vietnam” and the label “Made in China”. The company inspected the entire shipment and discovered that many of the remaining scarves had signs of the label being cut off at the edge.

In response to the above incident, Mr. Hoang Khai - Chairman of Khaisilk Group later admitted to the media that he "sold 50% of 'Made in China' silk in his system" and apologized to consumers.

Khaisilk silk scarves were concluded to "not contain any silk ingredients as announced".

Statistics from the General Department of Customs show that within 3 years (2006 - 2009), Khai Duc imported fashion products from China and Thailand. However, from 2009 to October 15, 2017, the company no longer imported fashion items. From 2012 to present, the company has not conducted production, processing or ordering processing of fashion products from domestic enterprises and production facilities.

Instead, this enterprise mainly buys finished products from stores, businesses, and other enterprises in the market and attaches one of three product labels: "Khaisilk®", "Stylized Khaisilk" and "Khaisilk Made in Vietnam" to sell in the market.

At the end of October, Minister of Industry and Trade Tran Tuan Anh signed a decision to establish an interdisciplinary inspection team at this enterprise due to allegations related to business fraud.

In early November, Deputy Prime Minister Truong Hoa Binh - Head of the National Steering Committee against smuggling, trade fraud and counterfeit goods directed the relevant agencies to inspect and clarify the violations of the law by Khaisilk Group in trading silk products. The Deputy Prime Minister requested the Ministries to report to the Prime Minister the results of the inspection before December 15.

According to VNE