Home appliances maker Asanzo shuts down as fraud allegations hurt sales

By Dat Nguyen   August 30, 2019 | 09:20 pm PT
Home appliances maker Asanzo shuts down as fraud allegations hurt sales
Asanzo employees assemble TV screens at a factory. Photo courtesy of Asanzo.
Asanzo has ceased all operations after suffering losses of VND70 billion ($3 million) following allegations it was selling Chinese imports as Vietnamese products.

The HCMC-based home appliances maker said in a statement Friday that it has been spending at least VND1 billion ($43,000) a day for the last 70 days since the government ordered an investigation into the company.

While retailers were not selling its products, the company has had to meet its overheads, including staff salaries, for over two months, the statement said.

Friday was the deadline that Prime Minister Nguyen Xuan Phuc had set for the investigation to announce its results, but the National Steering Committee Against Smuggling, Trade Fraud and Counterfeiting Goods said it has not reached a conclusion.

Dam Thanh The, chief of staff of the committee, said that as the case involves many government bodies, it needs to be investigated thoroughly before reaching a conclusion, adding that the committee will release results "as soon as possible."

Tran Huu Linh, head of the Vietnam Directorate of Market Surveillance under the Ministry of Industry and Trade, said many businesses were Asanzo’s partners, therefore careful investigation was required.

A report by Tuoi Tre newspaper in June had said that Asanzo imports components from China, assembles products, replaces "made in China" stickers with Vietnamese ones, and sells them as its own.

Tuoi Tre claimed that Asanzo did not manufacture any of the components for its products and imported everything from China.

In response, Asanzo Chairman Pham Van Tam said the company did not violate the law in labeling its products as "made in Vietnam". He said the firm imports about 70 percent of the product from China but make other components like TV plastic cases and remote controls in Vietnam.

The trade ministry admitted in June that the country did not have specific regulations on how to classify a product as "made in Vietnam". In its latest bill, it has proposed that if a product has a domestic manufacturing added value of 30 percent of its price, it could be labeled "made in Vietnam".

The Vietnam Chamber of Commerce and Industry (VCCI) has voiced its support for Asanzo. On July 30, it said that Asanzo labeling its products as "made in Vietnam" was in accordance with the laws.

Asanzo, founded in 2013, has the fourth largest market share in Vietnam's TV market. It had expanded into the refrigeration, consumer electronics, home appliances, and smart phone segments.

Focusing on the rural market, it accounted for 70 percent of the TV market in rural areas and 16 percent in the whole country after three years of operations.

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