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Two more MLM companies sanctioned

Released at: 09:04, 21/07/2016

Two more MLM companies sanctioned

Photo: Illustration

One fined and one has license revoked by Vietnam Competition Authorities for violations in business activities.

by Luong Nhi

The MLM Vietnam Trading and Manufacturing Investment Joint Stock Company and the Truong Giang Investment and Trading Joint Stock Company have been punished for business violations in their multi-level marketing (MLM) activities, according to a recent announcement from the Vietnam Competition Authority (VCA) under the Ministry of Industry and Trade (MoIT).

Following an investigation, VCA announced on July 20 that MLM Vietnam would be fined VND350 million ($15,694) for issuing the same MLM business code to more than one agent, not signing contracts with agents, and not committing with MLM agents to accept the return of goods.

Located in Hanoi’s Cau Giay district, MLM Vietnam has 30 days to challenge the VCA decision.

On July 19 VCA also announced the withdrawal of Truong Giang’s business license. It had previously decided to fine the company VND350 million ($15,694), on June 17.

On April 26 the Hanoi Department of Industry and Trade also found that the company, located in Hanoi’s Ha Dong district, had sold products at between 50 and 82 times the real price.

“The withdrawal of the license does not liberate enterprises from their legal responsibilities to agents or business partners,” the official VCA announcement said.

VCA also punished two more companies that had conducted business while unlicensed: the Nam Hai Quy Nhon Limited Company in south-central Binh Dinh province and the Hop Phat Investment and Trade Promotion Company in northern Thanh Hoa province.

At the beginning of July two MLM companies - the Zija Co. and the Gano Excel Vietnam Company - decided to suspend their operations. Enterprises can suspend their operations for a maximum of 12 months. Beyond this time their business license will be withdrawn under Decree No. 42 on MLM activities.

Zija’s has suspended its operations from July 1 to June 30, 2017 as it must reorganize its company structure and human resources, while Gano has suspended its operations from July 17 to January 1, 2017 as it must resolve issues relating to office rentals.

Decree No. 42 stipulates that, despite suspending operations, MLM enterprises must still protect the rights of their agents under Vietnamese law.

It is recommended that individuals involved in the MLM business be fully conversant with official information from VCA to protect their rights.

  • TAGS
  • multi-level marketing
  • Vietnam Competition Authority

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