Vietnamese multi-level marketing firms go bust in bulk

By Nguyen Ha   May 5, 2019 | 02:22 pm GMT+7
Vietnamese multi-level marketing firms go bust in bulk
Group of victims protested for refund at pyramid-scheme company Modern Tech's headquarter in Ho Chi Minh City on April 8, 2018. Photo acquired by VnExpress.

A spate of multi-level-marketing firms are downing shutters amidst thousands of clients claiming they have been cheated.

The Ministry of Industry and Trade recently received business termination requests from two Hanoi companies, G10 International Commercial Franchise Co Ltd and Med Media Co.

The companies, which operate multi-level marketing schemes, have cited poor business results as the reason for the termination request.

Another company, Khang Loi Thai Co Ltd in Hanoi’s western district of Cau Giay, said it has ceased all its multi-level marketing activities since last November.

The company is said to be a successor to Thien Ngoc Minh Uy, a major multi-level marketing company whose license was revoked in 2017 for engaging in illegal activities. It is estimated that 17,000 investors were left uncompensated after the company went down.

The trade ministry also said it has recently revoked the business licenses of five other companies that did not comply with Vietnam’s laws on multi-level marketing - CNI Vietnam, Sen Viet Group, Rain International Vietnam, World Vietnam and Tam Sinh Yofoto Vietnam.

In recent years, a number of companies in Vietnam have operated pyramid schemes under the guise of multi-level marketing, taking money from tens of thousands of people and leaving them in the lurch.

Last April, investors claimed they have been scammed by Ho Chi Minh City-based startup Modern Tech which used a cryptocurrency pyramid scheme to commit fraud worth estimated at VND15 trillion ($645 million), affecting 32,000 people.

In July, HCMC-based Sky Mining, a self-proclaimed largest cryptocurrency mining firm in Vietnam, was also accused of fraud. Its CEO Le Minh Tam absconded just five months after the company was established.

Over 800 people have petitioned for the man’s extradition from the U.S., where he is believed to be residing.

There are 23 companies operating multi-level marketing schemes in the country, according to the Ministry of Industry and Trade.

 
 
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