*In Zambia its thriving
THE Bank of Namibia has declared Longrich Bioscience as an illegal financial scheme, and has called in its promoters to cease their operations immediately.
“Considering the assessment made, the bank hereby declares Longrich as an illegal financial scheme. The promoters of Longrich have been directed to cease their operations immediately”, communications deputy director Kazembire Zemburuka said in a media statement on Friday.
The central bank had launched investigations into the scheme following constant public enquiries on the legitimacy of the business activities of Longrich, and the results indicate that it is illegal.
Although the company aims to be selling a variety of household cleaning and personal care products and pet care products, Zemburuka said the core activities involve the recruitment of members at a fee.
“Participants are encouraged to introduce new members to the scheme to supposedly buy products, and earn monetary rewards and progress in status. As a result, the initiating member slows in recruiting, and starts to benefit from the contribution of the new members subsequently joining them,” he explained.
Zemburuka said this is typical of illegal schemes.
It is not mandatory for Longrich members to sell the products, but the marketing strategy focuses on new members’ recruitment primarily as the source of income.
“Because the business model relies on money paid in by new recruits, the business model is unsustainable and will result in participants, especially those at the bottom of the scheme, losing their money” the statement read.
Longrich promotion videos show that members are asked to join by paying a minimum of N$1 000.
Members are thereafter encouraged to recruit more people, and are paid a signing fee for signing up new associates who also help them get monetary points.
Because of this, Zemburuka said the business activities of Longrich contravene Section 55A of the Banking Institutions Act, which states that “a person or banking institution may not conduct, permit or become involved in the conducting of, or the acceptance or obtaining of money, directly or indirectly, from members of the public, as a regular feature of a business practice, with the prospect of any of such members receiving payments or other money-related benefits directly or indirectly.
Zemburuka said should Longrich and its promoters wish to continue with the sale of Longrich products, such products should be sold directly to customers.
The scheme was reported in a Botswana daily that it had duped countless Motswanas in 2016.
According to Longrich’s website, the “illegal” scheme running company has operations in 15 countries, including Zambia South Africa, Thailand, Nigeria and Indonesia.
The company also boasts of eight laboratories across the world, with headquarters in Longliqi Bio-Industrial Park, somewhere in China.