KATHMANDU: On August 10, the Itahari Sub-metropolitan City swung into action against illegal networking businesses by closing the offices of three companies – Global Oriens, Healthy Living Nepal, and Royal Associate.
In another incident, on August 19, three individuals from Baitadi and Achham were arrested in Mangalsen of Achham. They were accused of engaging in fraudulent activities under the guise of a networking business. Ten individuals had filed a complaint against the three at the District Police Office, Achham, alleging fraudulent activities through RNC Trading Pvt. Ltd.
These incidents, taking place in the eastern and far-western regions of the country, serve as evidence of the expanding presence of networking businesses in Nepal. After duping the general public out of substantial sums of money, the networking business, which went out of the scene or operated with limited visibility for about a decade, is now gaining prominence. One key distinction is that while earlier companies used to charge significant amounts of money during initial membership enrollment, companies these days are enlisting members for nominal fees or even for free. Such enterprises often market their products on social media as indigenous and health-enhancing items. They also organize events in various hotels across the nation to recruit members. By adopting a pyramid-style structure for member recruitment, they generate revenue by selling substandard goods at inflated prices.
In 2011, the government took action against numerous companies, including Unity, Herbo International, Crystal Vision, and Robeus International, for deceiving the public through pyramid-style membership models. These companies enticed individuals to become members by purchasing their products, while also luring others into the scheme.
A resurgence of similar business models is now evident, with companies proliferating in urban and rural areas. These entities employ pyramid-style membership recruitment strategies and promote their products and services by promising attractive incentives such as prizes, foreign tours, and schemes. Operating from the Kathmandu Valley, these companies have expanded their operations countrywide. They predominantly target housewives and older men. Some of the notable companies involved in network marketing business include Nature Herbs, Organic World Group, Uturn International, iBoss Global Life International, New Bivek Enterprises, Healthy Living Nepal, Care Marts International, Care Nation International, Global Orions, and Api Life International.
When approached by this scribe for membership, representatives of Organic World Group and Healthy Living Nepal Pvt. Ltd. indicated that membership was available at no cost. However, they explained that members would only benefit if they recruited additional members underneath them, leading to promotions and commission entitlements. Managers within these companies are tasked with selling the company’s products to their recruited members. Similar inquiries to Uturn International, Care Nation International, and others confirmed that these companies indeed operated pyramid-style networking businesses under the guise of direct product sales.
Surprisingly, relevant authorities are taking no initiative to control these illegal activities. Local governments too have done little to control these illegal businesses. The Department of Commerce, Supply, and Consumer Protection, too, appears to have neglected its monitoring responsibilities. While the department claims to have informed all district administration offices about such fraudulent activities and recommended necessary action, no subsequent follow-up or progress has been reported. Gajendra Prasad Thakur, the director general of the department, clarified that both district administration offices and local governments must play an effective role in addressing this issue.
The department dispatched letters to all 77 district administration offices around 17 months ago. However, the department has not received information regarding any actions taken in response to these letters. “We are currently studying documents seized from such companies. I cannot divulge more details now,” said Thakur. “Conducting pyramid-style businesses and selling products without a license under the pretext of direct sales is prohibited. Violators will face penalties.”
Who is involved?
Most of the promoters of these pyramid-style businesses have past involvement in similar ventures. Raj Dangal, previously associated with Greenbuti, now operates iBoss Global Life International with his wife, Sarita Guni, as a promoter. Dangal was previously arrested for his participation in illegal networking businesses. Another promoter of iBoss Global Life is Hemanta Bahadur Pal, a former AIG of Nepal Police. Sriballabh Nepal, formerly linked to Herbo International, is another iBoss Global Life promoter.
Promoters of Care Marts International include Pasang Lama, Sarala Lama, Dinesh Prasad Adhikari, and Dal Bahadur Saru. Pasang Lama was previously associated with various companies as a ‘network leader’. Similarly, Balram Subedi, Subash KC, and Arjun Giri, formerly involved with EMI Network, are the promoters of Uturn International, which essentially carries out the same business under a new name.
The promoters of Api Life International are Ram Bahadur BC, Upa Bahadur Paija Pun, Lep Bahadur Purja Pun, and Sandesh Khadka. Likewise, Binita Gurung, Rudra Bahadur Neupane, Phani Raj Lohani, Kaurav Adhikari, Khagendra Dahal, and Bishnu Prasad Kafle are the promoters of Care Nation International Pvt Ltd. Lohani was previously associated with Unity International.
