KATHMANDU: Nepalese law does not allow the pyramid networking business. After finding that the pyramid-styled networking business has been a means for executing fraud and deceit, and abiding by the Supreme Court’s decision of 2011, the government has banned the pyramid structured networking business in Nepal.
Dozens of companies and individuals involved in networking business have been sued or brought back to the legal track since then.
Yet, the networking business seems far from being curbed. The business that was operated openly is running covertly now. Lately, the police have found the involvement of international groups.
The Department of Commerce, Supply and Consumer’s Welfare Protection(DoCSCWP) wrote a letter to the Central Investigation Bureau (CIB) of Nepal Police on September 29 and urged to take action against the people involved in the frauds related to networking business.
The Department even provided the names and contact details of more than 25 companies and 50 individuals involved in such frauds.
According to Shiva Raj Sedhai, the Director of Foreign Trade Regulation Division of the Department, the DoCSCWP carried out a study to find out whether the networking business was functioning covertly.
The Department has kept the details of the companies and the people involved confidential as the case under police investigation. Yet, many such frauds have been nabbed and sued in the past as well.
Director Sedhai informed that DoCSCWP had received many complaints about the covert functioning of such businesses.
The study found 25 companies involved in the pyramid structured networking business.
According to him, the Department requested the police to arrest the networking entrepreneurs as per the provisions in the Act to Regulate and Manage the Direct Sale of Goods 2017 and the Regulations 2019.
Director Sedhai informed that the primary investigation has shown the networking entrepreneurs collecting money through membership, and setting conditions for the sale of goods and supplies of the company.
“Going through the complaints and the letters, the Department found more than 25 companies and 50 people involved in the pyramid structured networking business,” he told Khabarhub.
The Department has also written to the Company Registrar’s Office asking the details of the directors of those 25 companies.
According to the Department sources, most of the complaints are related to the frauds through Indian companies.
The Department has kept the details of the companies and the people involved confidential as the case under police investigation. Yet, many such frauds have been nabbed and sued in the past as well.
The series of networking frauds
Indian Sign Group: The joint team of Nepal Police and Public Revenue Investigation Team arrested 12 Indians from Hotel Yak and Yeti in April 2019 for running multi-level pyramid network marketing.
Iboss Global Marketing: The investigation showed that frauds worth millions of rupees were done via Ibos Network Marketing in May 2018.
Q Network: Nepal Police nabbed 102 persons in July 2016 alleging them for indulgence in the fraud worth millions of rupees via Qnet network marketing and sued 14 holding them responsible for the crime. The arrested then included some senior doctors, engineers, and Chartered Accountants as well.
Herbo International: Herbo International Network was also found indulged in financial irregularities and fraud under the hide of sale of the herbal product. The network marketing came to an end after the police raid and vigilance.
Unity Life: The country saw another networking business under the name Unity Life Insurance in 2003. When the administration realized it had been committing fraud in the name of insurance and health, Unity had already bagged more than 5 billion rupees.
Gold Quest: The Gold Quest at pyramid marketing forum started in Nepal in 2003. Thousands of Nepalis became the victim of this network marketing as they were tempted to get gold coins as a return for becoming the member by paying 35000 in the beginning.
Besides these, there were BWBL, DXN, and many other small networking groups in the beginning.
Former Senior Officials of Police, Doctors and CA found involved in Networking
The research carried out recently revealed that networking businesses have trapped the senior officials and professionals including former DIG to former Attorney General of the country.
The license provided by the Department of Commerce, Supply and Consumers Protection to the Nature Herbes International mention Former DIG Chhabi Joshi as its Vice President.
The license was issued in July. Former Attorney General and former Chief of Gandaki Province Babu Ram Kunwar also connected with this networking business.
Similarly, the Proprietor of New Bibek Enterprises Pvt. Ltd. (DXN) which also got a license for networking business is Bhimsen Gurung, the Central Member of Rastriya Prajatantra Party.
Former DIG Hemanta Malla, who has executed various roles including the leadership in the Central Intelligence Bureau of Nepal Police, says that the networking business has been prospering with the support and protection from the ‘well-esteemed’ people and families.
“The investigation has shown that the professionals like doctors, engineers, professors, and many others esteemed people are connected to networking business here,” former DIG Malla said, “In India and Malaysia the international groups are also found involved.”
Perhaps, this protection has been nurturing the networking business covertly despite legal restrictions to do so.
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