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Dirty silk road
Son Nguyen
Sunday,  Dec 17, 2017,22:07 (GMT+7)

Dirty silk road

Son Nguyen

When the Ministry of Industry and Trade early this week referred the Khaisilk case to the Ministry of Public Security for criminal investigation alongside findings from a weeks-long inspection, a gloomy picture has been unveiled. There has existed, for long, not just a trail, but a dirty silk road.

Not only have consumers been cheated for decades, but also have authorities been neutralized in the cause of protecting domestic businesses. However, while consumers fall victim to the cheat by Khai Duc Company as the owner of the Khaisilk brand, competent agencies mandated to protect consumers and safeguard domestic interests can hardly come clean.

As widely covered in local media, the Ministry of Industry and Trade this Tuesday announced findings in an inspection into Khaisilk. Multiple violations at Khaisilk have been established by an interdisciplinary inspection team led by the ministry, with the more serious infringements including sales of fake products, fraudulent declaration of product origin, and irregularities in the use of invoices among others.

The whole story began with complaints from a customer on Facebook in late October. It happened that the customer bought 60 silk scarves from a Khaisilk shop in Hanoi City, and found one with two labels, with one showing it is made in China and the other indicating this is the Khaisilk product and made in Vietnam. Upon the accusation, the brand owner, Hoang Khai, admitted in local media that his company has traded in both Vietnam-made and Chinese silk products for 30 years, all bearing Khaisilk brands at a proportion of 50-50. The admission was a seismic one that prompted the ministry to launch an urgent inspection days later.
Findings in the inspection are even more devastating though.

The silk scarves branded Khaisilk contain no silk at all, Dat Viet news site reports, citing the findings. More specifically, Nguoi Lao Dong newspaper says although Khaisilk had always pledged to customers that their products are all genuine silk, scientific analysis shows such products are made from other materials. Up to seven of ten Khaisilk products taken for testing show none contain natural silk, but polyester, or a blend of other materials such as rayon, acrylic and wool, which gives a bitter aftertaste for numerous customers.

For long, many local consumers have taken pride in Khaisilk items as high-quality Vietnamese products, and now they have to accept that their belief has been wrongly placed since all are valueless fake products, Dat Viet says in a commentary.

Le Hien, a consumer in Hanoi, says in the news site zing.vn that when the bombshell fraud was unveiled last month, she and her friends still felt that the fraud on product origin was not much a big scandal, but upon learning that such scarves are no silk at all, she feels frustrated at the all-out cheat.

The Ministry of Industry and Trade in concluding the inspection also stresses that Khaisilk has since 2012 never produced any silk, nor have silk products processed at other enterprises on its behalf. The company has simply purchased products from any source on the market, then attached its Khaisilk tags onto such items. The illicit trade has generated huge profits for the company, as it sold a so-called silk scarf for some US$30 compared to the purchasing price of a mere US$1.3 or so.

Lao Dong newspaper, citing the inspection’s results, says that the Khaisilk has either concealed information on product origin, or supplied wrong information to customers, which amounts to a crime on trading of fake products.

As the case has been transferred to police, criminal proceedings will be taken, and harsh punishment for the company and its owner is inevitable. However, as seen in local media, experts and the general public also demand a probe into the responsibility of competent agencies.

In an analysis, Sai Gon Giai Phong newspaper raises the question why the fraud could have persisted for 30 years without being unearthed by competent agencies, but by a consumer. “The question here is whether State agencies have fulfilled their duties, or whether there is cover-up by certain agencies,” ponders the newspaper.

Similarly, Dat Viet bluntly asks: “Why have competent agencies - tasked with overseeing the market and protecting the consumer - allowed a major firm like Khaisilk to cheat consumers for dozens of years?” In the same chorus, Tien Phong newspaper also wonders how silk scarves without any silk could have marched into the market without knowledge of market monitoring authorities.

The dereliction of duty in this aspect, says local media, has adversely affected consumer confidence in Vietnam-made products, despite numerous movements and campaigns to rally support for local goods.

As the case of Khaisilk unfolds, Lao Dong says many local enterprises by cheating consumers are committing suicide, as their practices have seriously dampened consumer confidence. “Vietnam-made products are now staying at the 46th position out of 52 in terms of prestige as perceived by local consumers,” says the newspaper, citing data from the Made in Country Index 2017 compiled by Statista. “What is more startling is that Khaisilk is just the tip of the iceberg,” comments the paper.

In fact, numerous products with the Vietnam-made tag for domestic consumption and for exports have been found as copycats sourced from China, from consumer goods to veggies and other manufactured goods, according to Sai Gon Giai Phong. Since last year, customs officers in HCMC have detected 20 containers of goods imitating well-known Vietnamese products or European items. Meanwhile, the Ministry of Industry and Trade has recently announced that up to one-third of steel products bound for the U.S. market carry the same code as Chinese products, and the U.S. has also slapped high tariffs on Vietnamese steel on suspicion such products are China-made, says the paper.

Therefore, according to Tien Phong, it is high time the Ministry of Industry and Trade launch far-reaching inspections into local producers to ensure that Vietnam-made products are authentic. This is not only meant to safeguard consumers but also to protect other enterprises that pursue integrity in their business.

The dirty silk road, which has become more visible following the case of Khaisilk, needs to be stonewalled for good, if national interests are to be guaranteed.

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