Health product founder reports over RM500,000 in losses linked to alleged black market sales
KUALA LUMPUR: A local health product entrepreneur has revealed that her company suffered losses exceeding RM500,000 after allegedly becoming the victim of black market distribution activities, an incident that not only impacted sales but also damaged customer confidence and the brand’s reputation.
Founder Wan Razila Iluni Wan Ramli said the issue first surfaced in March after the company received a growing number of complaints from consumers through social media claiming that the product’s effectiveness was no longer consistent with previous purchases.
The unexpected feedback prompted the company to launch an immediate internal investigation while temporarily suspending production as a precautionary measure to safeguard consumers and preserve product quality.
Wan Razila said the decision was necessary to ensure that only products meeting the company’s quality standards remained in circulation while investigators examined the source of the complaints.
Preliminary findings, she said, indicate that the alleged black market activities may have involved one of the company’s employees working together with a wider distribution network.
She added that consumer feedback has also raised concerns that certain products circulating in the market may have been tampered with, including possible alterations to their contents or formulation by unauthorised parties.
However, she stressed that investigations into those allegations are still ongoing and no final conclusions have been reached.
According to Wan Razila, the company has handed over all legal matters to its legal team, including the filing of reports with the relevant authorities, to facilitate further investigations and determine the appropriate legal action.
She said the company intends to pursue legal remedies against those found responsible and is prepared to seek substantial compensation through the courts for the financial losses and reputational damage allegedly suffered.
Beyond the financial impact, Wan Razila said the incident significantly disrupted the company’s operations, forcing it to halt production while addressing public concerns and reviewing its internal quality control processes.
She acknowledged that the controversy affected consumer trust, making it necessary for the company to undertake a comprehensive product redevelopment programme before returning the product to the market.
As part of its recovery strategy, the company is introducing new packaging alongside improvements to the product formulation and additional anti-counterfeiting security measures.
Among the enhancements planned are specialised holographic security labels and upgraded packaging features designed to make genuine products easier for consumers to identify while reducing the risk of imitation or unauthorised tampering.
Wan Razila also admitted that weaknesses within the company’s internal management and operational controls may have created opportunities for the alleged black market activities to occur.
In response, the company is undertaking a comprehensive restructuring exercise covering its management systems, operational procedures and authorised sales agent network to strengthen governance and improve oversight.
She emphasised that the company will adopt a zero-tolerance approach towards any employee or authorised agent found to be involved in black market distribution or activities that compromise product integrity.
Those proven to have violated company policies will face legal action and permanent removal from the company’s authorised distribution network.
Wan Razila said the experience serves as an important lesson for the business and has reinforced its commitment to strengthening internal controls, enhancing operational transparency and ensuring that only authentic, safe and high-quality products reach consumers in the future.
