The Minister of Industry and Trade, Trần Tuấn Anh, on Thursday asked the Department of Market Watch to look into the origin of products of the Khaisilk Group following a complaint that it was selling products made in China.— Photo zing.vn

HÀ NỘI — The Minister of Industry and Trade, Trần Tuấn Anh, on Thursday asked the Department of Market Watch to look into the origin of products of the Khaisilk Group — a top Vietnamese silk brand — following a complaint that it was selling products made in China.

Anh also asked the department to clarify the signs of violating regulations of goods origin and trade fraud in the scandal.

On the same day, inspectors raided a shop owned by the famous Vietnamese silk brand in Hà Nội.

Trần Hùng, the department’s deputy director told Người Lao Động (Labourers) newspaper that they had seized suspected products worth VNĐ30 million (US$1,320) from the shop. He further said the import of made-in-China goods and selling under “Made-in-Việt Nam” brand has ruined its image among people.

“Hoàng Khải, the owner, had built Khaisilk as a symbol of a national brand. Khaisilk products are much sought after by many tourists in Việt Nam,” he added.

He said all the relevant State management agencies should rush to clarify the issue and ensure prosecution in case of serious violations.

Khaisilk is a renowned high-end brand with a history of over 30 years. The scandal has caused a shockwave among many customers.

The scandal broke out when a business in Hà Nội posted on Facebook on Monday 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 Hàng Gai shop in Hà Nội for VNĐ644,000 ($28) each. However, one scarf had two tags including “Khaisilk Made in Việt Nam” and “Made in China.”

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

Group Chairman, Hoàng Khải, said in an interview with online newspaper zing.vn, that the scarves were actually imported from China.

Khải has apologised and offered compensation to customers. He said that half of the silk used by Khaisilk came from China, while the rest came from Vietnamese craft villages. However, he insisted that it only uses high-quality material although not all of its products are made in Việt Nam, as advertised for years.

He said the reason was that Việt Nam’s silk sector has seen a material shortage from handicraft villages while the market demand has been fluctuating with diversified requirements. This is why they imported silk from China without taking into account the origin of products, he told the newspaper.

He also admitted that due to expanding operation to other fields such as real estate and tourism, the silk business has not been controlled and supervised strictly.

Lawyer Nguyễn Thế Truyền, director of the Thiên Thanh Law Firm, said the owner’s admission of importing silk from China and selling it as ‘Made in Việt Nam’ has signs of legal violations.

He violated the Law on Intellectual Property as businesses have to clearly show the origin of their products when registering for brand-name protection. In addition, the group also violated the Law on Consumer Protection.

Truyền added that the group could face criminal offence if management agencies discover fake products worth over VNĐ30 million.

Phạm Ngọc Hùng, vice chairman of the Việt Nam Anti-Counterfeiting Fund, told Tuổi Trẻ (Youth) newspaper that Khaisilk is probably guilty of trade fraud for replacing a Chinese tag with its own tag to con customers.

It is unacceptable for a company to use its reputation to cheat customers, no matter how the quality, Hùng said. — VNS