KVIC discovers malpractices at MKVIA, closes its Khadi stores

The Khadi and Village Industries Commission has shut the Mumbai Khadi and Village Industries Association’s retail stores after discovering that it was engaging in unfair trade practices including selling fake Khadi goods.

KVIC sealed all of the MKVIA’s bank accounts and shut its brick-and-mortar stores on November 11, the organisation announced in a press release. Eleven out of the MKVIA’s 13 stores were sealed at the beginning of the press release but that all 13 were sealed later on.

The organisation said it first found out about the MKVIA’s malpractices in the 2018 financial year when, as part of a regular physical verification of its Khadi Bhawans, KVIC found that the MKVIA was selling non-Khadi fabric as Khadi. KVIC warned the organisation of “stern action” against it should problems persist.

Following an investigation, KVIC decided to revoke the MKVIA’s right to use the Khadi certification which was awarded to the it in June 2019. However, KVIC found that the MKVIA was still selling products with “Khadi Mark” labels even after been banned from doing so. KVIC also said that the MKVIA has failed to pay its organisation back sufficiently for a loan given towards Khadi production activities.  

“Such malpractices within KVIC system shall not be tolerated,” said a senior KVIC official in the organisation’s press release. “This is a strong message for all the institutions engaged in any form of malpractices. Any irregularities in the system if found would be severely penalised.”