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Govt demands tough sanctions against Khaisilk for trade fraud

Wednesday,  Jan 10,2018,23:19 (GMT+7)
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Govt demands tough sanctions against Khaisilk for trade fraud

HCMC – Deputy Prime Minister Truong Hoa Binh, head of the National Steering Board for Prevention of Smuggling, Trade Fraud and Counterfeit Goods, has asked the Ministries of Public Security, Industry-Trade, and Finance, as well as relevant agencies to strictly handle violations by Khai Duc Co Ltd, known for its silk brand Khaisilk.

Earlier, the Ministry of Industry and Trade announced a slew of violations committed by the company such as illicit trade, production of counterfeit and prohibited products, and infringement of consumer rights, the Vietnam News Agency reports.

Data of the General Department of Vietnam Customs shows that the company imported fashion products from China and Thailand in the 2006-2009 period. However, it had no longer conducted the activity since 2009.

The company had neither produced and outsourced fashion products nor placed outsourcing orders from local clothes manufacturers since 2012.

Instead, it had mainly purchased finished products from shops, household businesses, and other enterprises, and had sold them under the brands of “Khaisilk®”, “Khaisilk cach dieu” (Stylized Khaisilk) and “Khaisilk Made in Vietnam.”

The company showed signs of violating the Penal Code for trading in fake goods. A quality inspection revealed that certain products of the company contain no silk at all while their labels indicate they are of 100% silk.

The company was also found to breach the regulations on tax and invoice management. Some invoices were not issued and managed by tax authorities while others had the wrong names of goods declared.

Notably, there were huge differences between accounting records and actual data at one branch of the company. The company also failed to explain the reasons for the differences, and present invoices for such products.

In terms of its labeling, some products did not have labels, and some labels did not have as sufficient information as required by the Government’s decrees on goods labeling.

The company also concealed information or provided insufficient and inaccurate information for its consumers, and sold products with unclear origin.

The Khaisilk scandal began with a complaint from a customer on Facebook in late October. Dang Nhu Quynh bought 60 silk scarves on behalf of his company from a Khaisilk store in Hanoi City, and found one with two different labels with one reading “Khaisilk – Made in Vietnam” and the other “Made in China.” He checked the other scarves and found remaining traces of “Made in China” labels.

Given the accusation, the brand owner, Hoang Khai, admitted in local media that his company had traded in both Vietnamese and Chinese silk products for 30 years, all bearing Khaisilk brand at a proportion of 50-50. The admission prompted the Ministry of Industry and Trade to launch an inspection into the company’s business practices days later.

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Giấy phép Báo điện tử số: 321/GP-BTTT, cấp ngày 26/10/2007
Deputy Editor-in-Chief: Pham Huu Chuong
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