KOZHIKODE:With the drive initiated against multi-level marketing (MLM) companies across the state coming to a standstill, several such firms have become active again, police officials said.
The proposed Kerala State Multi-level Marketing (Control and Regulation) Bill, 2013, to regulate MLM business in the state has been rendered to cold storage and the probe into several high profile cases are facing roadblocks because of interference, sources pointed out.
“This include cases against Amway, RMP, Nano Excel, Tycoon Empire and Orbit 9X etc, which siphoned off crores from the state,” said a senior official who investigated the cases in Kozhikode.
The crux of the Bill is that it restricts the “distributor from appointing or entrusting any person with the task of doing the business on behalf of himself or a direct seller or an MLM entity” to prevent money chain model of operation. “If the Bill is implemented, all MLM companies would have to shut shop in the state,” he said.
The state government had invited suggestions from trade union leaders regarding the Bill. All India Multi Level Marketing Employees Federation is now suspicious of the delay in framing the legislation. “The government first banned flex boards in the state and then rolled back the decision. The same is happening with action against MLM companies,” alleged Kalathingal B Sureshkumar, general secretary, All-India Multi-level Marketing Employees Federation. The company Orbit 9X had recently swindled crores from people in Kozhikode, Wayanad and Palakkad districts. Though Kunnamangalam police had registered a case and arrested some of the accused, there is no headway.
As per the proposed Bill, a registered ‘MLM’ or ‘direct selling’ company can appoint ‘direct sellers’ and each ‘direct seller’ can have ‘distributors’ under him. However, distributor cannot appoint any person to work under him. It clearly points out that the income plan of a MLM entity shall not be based on the registration or enrolment of new direct sellers.
The draft bill proposes the constitution of a Multilevel Marketing Regulatory Authority for the registration and monitoring of MLM business. It also distinguishes a direct seller from a distributor and states that the relationship among direct-level marketing entity, direct seller, distributor and consumer or customer will be that of ‘among the principal, agent, sub-agent and third parties, respectively.