Editorial
Regulating MLM companies
Need is to enact stricter law than proposed
The cabinet proposal to enact a law styled, MLM Control Act 2012, aimed to regulate the so-called multilevel companies is a welcome move by the government.
The government has at long last responded to public outcries against fake companies that have already defrauded numerous customers playing on their gullibility.
Particularly, in the wake of the recent furore over the dubious business activities of the Destiny Group, which calls itself an MLM company, has prompted the government to go for enacting a law.
Considering the magnitude of their fraudulent practices blamed for pauperising and throwing many on to the streets, a stern law should have been in place long before.
The proposed law does not prohibit such business outright, but says that those found violating its provisions like obtaining a licence before launching such business or engaging in forgery will face jail term from three to five years and pay a maximum of 50 lakh taka as fine.
In practice, the activities of such fake companies come to the notice of the public or the government only after they have swindled millions of taka out of the victims. Worse yet, the fine provided in the proposed act is peanuts for such tricksters. The Destiny group now under close scrutiny is a case in point.
In the circumstances, the government would do well to review the necessity of the very existence of such companies called MLM that do not follow any standard marketing principles.
Many MLM companies even strayed into the field of banking as a massive infringement of the banking laws and without any semblance of financial discipline.
In the case of the law proposed, the government should consider making it stricter by increasing the amount of fine and the jail terms.
The companies already found to have bamboozled numerous people into losing money should be awarded exemplary punishment and made to compensate the victims adequately.
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