A Vietnamese silk brand popular with both local and international customers has been found to use no silk at all, the Ministry of Industry and Trade said on Tuesday.

The trade ministry has completed its inspection of Khai Duc Co. Ltd., which owns the Khaisilk brand, and has discovered numerous violations by the company.

The case file has been transferred to police to verify the alleged criminal offenses, according to the ministry.

Khai Duc Co. Ltd. is a subsidiary of Khaisilk Group, owned by local tycoon Hoang Khai, who is also known as ‘Khai Silk.’

The popular silk brand made headlines in October, after a customer found a Khaisilk scarf, purchased from a store in Hanoi, carrying both a ‘Made in China’ and a ‘Made in Vietnam’ label.

Hoang Khai was later forced to admit that half of his scarves were sourced from China and falsely sold using made-in-Vietnam labels.

A Khaisilk scarf found with both the 'Made in China' and 'Made in Vietnam' labels.

‘Khai Silk’ has made no further comment while an inspection by the Ministry of Industry and Trade has been underway.

The inspection’s conclusion, released on Tuesday, has left local consumers shocked, as the company apparently did not source its products from China, and its silk merchandise did not seem to be made from silk.

No silk in Khaisilk

According to the trade ministry, while the company markets its products as ‘made of 100 percent silk,’ tests have found that some of the samples contained no silk at all.

The company has also violated laws in terms of tax, receipt management, product labeling and origin.

The ministry underlined that Khaisilk’s brand owner has concealed information, or provided insufficient, inaccurate or misleading information regarding its products to consumers.

A Khaisilk store in Ho Chi Minh City is seen in this photo posted on the company's Facebook page.

The company has allegedly mixed products of various origins with its made-in-Vietnam stock, but failed to keep consumers informed of the true origin of the merchandise.

According to customs data, Khai Duc imported fashion products from Thailand and China between 2006 and 2009, but no such importation was recorded between 2009 and October 15, 2017.

The Khaisilk brand owner had also stopped outsourcing silk products from local manufacturers since 2012.

Instead, the company sourced ready-to-use products from other stores and shops in Vietnam and replaced their labels with either the “Khaisilk®”, “Khaisilk cach dieu” or “Khaisilk Made in Vietnam” labels before putting them on sale through its chain.

In the October scandal, Khaisilk was found to have removed the “Made in China” labels from Chinese products and replace them with “Made in Vietnam” ones.

Hoang Khai has deactivated his Facebook page and disappeared from the public eye, and Khaisilk’s outlets in Hanoi and Ho Chi Minh City have all been shut down.

Market surveillance officer are seen at a Khaisilk store in Hanoi. Photo: Tuoi Tre

The scandal has disappointed many Vietnamese who long favored what they believed to be a strong Vietnamese brand.

Khaisilk scarves and ties were previously considered premium gifts for Vietnamese businesspeople and diplomats who chose to give to their prestigious guests or partners, and even world leaders.

According to Phu Nu Online news website, among the ‘famous’ customers of Khaisilk products are former United Nations secretary-general Kofi Anna, Janette Howard, wife of former Australian prime minister John Howard and former U.S. president Bill Clinton.

These public figures all chose Khaisilk when they were in Hanoi to attend the 2006 APEC Leaders’ Week.

A woman walks past a closed Khaisilk store in Ho Chi Minh City. Photo: Tuoi Tre

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