Widespread public backlash. A raft of looming investigations. What’s next for the once-posh Vietnamese garment brand? Garment firm Khaisilk is poised to face a series of investigations after a made-in-China scandal triggered widespread calls for a boycott of the once-posh Vietnamese silk brand last week.
On Monday, the Ministry of Industry and Trade said it had transferred all relevant documents to the police who are set to launch a criminal probe into Khaisilk after an inspection last week uncovered fake products made in China at one of the brand’s Hanoi outlets.
Trade minister Tran Tuan Anh also on Monday set up a joint task force charged with launching an independent probe into the case.
“Khaisilk’s actions have violated the law, damaging the value of Vietnamese brands and deceiving Vietnamese consumers,” Anh said at a meeting on Monday.
The scandal came to light on October 23 when a businessman in Hanoi took to Facebook to rail against products his company 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 Hang Gai shop in Hanoi for VND644,000 ($28) each, but one scarf had two tags: “Khaisilk Made in Vietnam” 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.
The brand’s owner Hoang Khai later admitted that half of the silk used by Khaisilk came from China, while the rest came from Vietnamese craft villages. But he was adamant that his company always used high-quality material.
Khai has apologized to customers and offered compensation. However, the public has started questioning whether Khaisilk had been receiving help from market watch authorities as its shops have allegedly been selling Chinese silk for years without being detected.
Khaisilk is a renowned high-end brand with a history of over 30 years, famous for its supposedly high-quality “made in Vietnam” products.
The scandal has triggered widespread calls to boycott its products. Vietnamese lawyers have also weighed in, saying aside from denting public confidence, Khaisilk Group, which owns the eponymous brand, could face legal action.
Khaisilk’s outlets in both Saigon and Hanoi have been closed since Friday.