Tigers taken for a ride
Though many were surprised at an MLM company becoming a sponsor of Bangladesh cricket team in the Asia Cup, multilevel marketing companies were pleased to see the promotion of controversial MLM business through the country's most popular sport.
Neway paid Bangladesh Cricket Board (BCB) Tk 1 crore to become a sponsor of the national cricket team that made it to the Asia Cup final by beating India and Sri Lanka in March.
Lenient attitude of the government and the state machinery has allowed controversial MLM business to flourish in Bangladesh. Many MLM companies have already swindled people out of crores of taka.
However, BCB President AHM Mustafa Kamal doesn't see anything wrong in accepting an MLM company as a sponsor of the national cricket team.
“Is there anything in black and white that we cannot take sponsor money from an MLM company?” asked Kamal.
“Neway offered the BCB the highest amount of Tk 1 crore, and if I did not accept the offer, you [journalists] would have written against me.”
“I did nothing wrong. If anything had been reported against the Neway like other MLM companies, I would not have awarded it the contract.”
He said the BCB kept Destiny away for its controversial activities that had been exposed in the media.
Kamal claimed there was no other offer at that time. He said the BCB allowed Neway to become a sponsor of the cricket team just four to five days before the tournament began on March 11.
But in reality, the board made the announcement on Neway's sponsorship at a briefing on March 1.
The BCB president said cricket is an expensive game and one needs money to run the show. He said when he took charge of the BCB three years ago, it had Tk 40 crore in fixed deposits that now stands at Tk 150 crore.
“I have to look after the board's interests. I don't get any money from the government,” said Kamal, also lawmaker of the ruling Awami League.
Wishing anonymity, a top Destiny official said they had intended to sponsor the national team in the Asia Cup. However, they were not so upset at another MLM company getting the deal as it would ultimately help boost their business.
Taking advantage of the absence of any laws or policies on MLM business in Bangladesh, vested groups have been swindling people out of crores of taka by offering them high returns on investments.
Earlier, the ITCL, Jubok and Unipay2u pocketed several thousand crore taka through MLM programmes.
Neway Bangladesh (Pvt) Ltd on its website says it is a Canadian-owned company and started off business here in 1999. It also claims it is a pioneer in direct sales method in Bangladesh.
The company says it provides trade opportunities to people in different sectors and age groups through exciting packages, contemporary compensation plans and world-class products. But the website shows that the company sells only beauty and health products, and tea.
It also claims that it has created 10 lakh employment opportunities to date.
Like Destiny, Neway, according to its website, also has a cooperative wing that claims to have business in real estate, afforestation, cattle farms and fisheries.
Former central bank governor Dr Salehuddin Ahmed thinks Neway played a game with the BCB and eventually won it by becoming a sponsor of the national cricket team.
“They [Neway] played a clever game,” Ahmed told The Daily Star.
“The BCB might not have any idea about MLM companies, but Neway justified its business before the cricket-crazy nation.”
Ahmed said neither the government nor people have adequate knowledge on MLM business where 98 percent people at the pyramid's lower end are losers.
“The government should have formulated a separate law on MLM business after detecting cases of fraud by Jubok in 2006,” he said.
Jubo Karmasangsthan Society, known as Jubok, embezzled Tk 1,440 crore from investors several years ago. Though the government has formed a commission to recover the money for paying back 160,000 investors, majority of them are yet to get any refund.
Investors of Unipay2u claimed that the company's top management has defrauded six lakh people of nearly Tk 6,000 crore between October 2009 and January 2011. Revnexx, Falguni Trade Int and dozens of other MLM companies have embezzled crores of taka from people across the country.
The latest name is Destiny 2000 that is known to many for sponsoring high-profile programmes such as Bangladesh Premier League and the World Marketing Summit.
The central bank first found out that Destiny has been illegally running banking activities. As of December 31 last year, the organisation collected nearly Tk 2,000 crore in deposits and share capital from people.
BCB President Kamal, also chairman of the standing committee on the finance ministry, claimed it was his committee that first spoke against fraud by MLM businesses.
“I talked on this issue [MLM business] first. My duty is to advise the government, not to take action. It is the government that has to act fast to take action against the MLM companies that cheat people.”
Speaking on condition of anonymity, a commerce ministry official said the ministry had drafted a law on direct sales one and a half years ago. But it is yet to see the light of day.
“We have drafted the law in consultation with different stakeholders. Now it needs the cabinet's approval.”