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Government asked, CBI to look into the operations of MLM companies

By Ak Sharma | Published on 05/12/2019

1 / 5 ( 1 vote )

It is quite likely that soon there will be a strict regulation on Network Marketing in India. From past few years people have lost money to the tune of hundreds of crores in ponzi schemes. Now Consumer Affair Ministry has asked Central Bureau of Investigation (CBI) to look into the operations of MLM companies.

Many ponzi schemes have surfaced on the name of investment. sooner or the later they collapses due to flaw in the business model. The government is planning to bring Network Marketing under Strict regulations on the lines of similar rules in the US, EU and Singapore. The strict regulation will impact many known companies in India like Tupperware, Amway, and Oriflame.

A team of Income Tax department has been put on operation to contact all registered MLM companies to know the source of funding. I.T department is suspecting involvement of black money. Many have not even deposited regular TDS on the source income given to the distributors.

India Direct Selling Association secretary general Chavi Hemanth: “The sector needs regulation. Over the last few years, we are in discussions with the government to bring the industry under some sorts of (regulatory) framework. There is no official definition of direct selling in the country.” According to an ICRIER study, the Prize Chits and Money Circulation Scheme (Banning) Act, 1978, which is sometimes cited for regulating this sector, is not applicable to direct selling and is outdated.

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Comments

  1. mantu says

    16/11/2018 at 5:41 PM

    direct selling company dreampacific vision sevices llp CBI investigation clean cheat CBI to this company

    Reply
  2. Juliana Rebello says

    28/11/2011 at 10:16 AM

    ATCR Co. (Aryarup Tourism & Club Resorts Pvt.Ltd.) CMD Ravindra Deshmukh is still absconding nearly 2 years we have been running to police stations, EOW and now to CID the case is handedover but they are just killing time and nobody is bothered to wipe-out tears of so many families who became victims of this cheater co.  Property & bank balances sealed & attached to the court for more than a year passed now.  some members killed themselves & some more are suffering & are in danger.  can we expect our system to come out with solution & disburse this attached property to its genuine investors, before its too late.

    Reply
  3. Anonymous says

    04/06/2011 at 4:03 PM

    hi! i just noticed you mentioned the name amway? its registered with ndia Direct Selling Association? so why shld they come under the strict regulation sling shot?

    Reply
  4. Harish Bhist says

    04/06/2011 at 6:57 AM

    “DER AAYE DURUST AAYE” EK DIN YE TO HONA HI THA. Lets hope for the best and a good news for legal and ethical companies with reliable service and good product.All so called mlm who run scam or money circulating services in name of Network Marketing will have to start packing their bags or work under regulation.

    Reply
  5. Vishwanatha Prabhu says

    04/06/2011 at 5:49 AM

    GOOD NEWS FOR GOOD MLM COMPANIES

    Reply

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