KATHMANDU, July 30: The parliamentary committee on industry, trade, labor and consumer protection set up a task force on Thursday to investigate the controversial network marketing companies recently licensed by the Department of Commerce, Utilities and Consumer Protection.
Nature Herbs International, Kumaripati; iboss Global International, Chabahil; New Bibek Enterprises, Ekantakuna; Healthy Living Nepal, Battisputali; Care Matters International, Chabahil; Uturn International, Tokha, and Global Oriens Nepal, Balaju, are among those that market regulator has allowed the networking business. According to the department, there are also six other companies in the pipeline.
The parliamentary panel has raised concerns amid searing controversy over whether or not to approve network marketing firms that were deemed illegal a decade ago. Parliamentary committee chairman Bimal Prasad Shrivastav said the panel tried to intervene after finding that almost all of the licensed companies were from those that have been declared illegal in the past.
To investigate the problem, the parliamentary body has set up a five-member sub-committee chaired by MP Som Prasad Pandey. The task force includes the legislators Prakash Rasaili, Amrita Agrahari, Krishna Kumar Shrestha and Sarita Kumari Giri as members.
The network marketing companies have historically been found to cheat their customers and cheat them out of billions of rupees. Unity Life International, Herbo International, Gold Quest International, Crystal Vision International, Best World Business Link and Robious International, among others, had caused people to suffer in the name of the networking business a decade ago. Unity Life International alone has cheated people out of around 4 billion rupees.
Following the incident, the Supreme Court ruled in May 2010 that the network business was illegal and ordered the government to abolish guidelines on network marketing of goods. However, the government moved the Supreme Court and moved its decision to be overturned. However, the Apex court upheld its decision on March 28, 2012, ruling the multi-level marketing business to be illegal.
The Central Investigation Bureau of the Nepalese Police even arrested 102 people on June 12, 2017 for running an illegal network business.
The issue has now entered controversy for the department after it was doubtful that seven such companies could be re-licensed in the past 1 month. Until a few days ago, the department had claimed that licensing out network marketing was a legitimate move. However, due to concerns from the public forums and parliamentary panel, the department has begun to twist its previous words by saying that there may have been some “technical errors” in the licensing process.
The law on the direct sale of goods (management and regulation) of 2018 and the relevant regulation of 2019 deal with the protection of the rights and interests of consumers by making all transactions related to the direct sale or distribution of goods reliable, be made transparent and competitive. Section 11 of the law has prevented companies from doing pyramid-based networking marketing.
The department, however, defended its action, stating that the licenses were issued in accordance with the provisions of the law. During a press briefing organized on Tuesday, the department said it had been tracking some of the licensed companies after discovering the companies were involved in suspicious activity.
At a session of the parliamentary committee on Thursday, Minister of Industry, Trade and Utilities, Lekh Raj Bhatta, denied the charges that the ministerial officials were bribed by the network marketing companies to obtain government approvals.
