Longrich illegal, says BoN
12 April 2019 | Business
The Bank of Namibia has declared the activities of Longrich, a Chinese company that distributes a variety of household cleaning products and personal care products, as an illegal financial scheme.
The central bank announced today that it has investigated the business model and activities of Longrich in Namibia.
People can join Longrich by paying a specified amount into a local business account that starts at a minimum of N$1 000. Members are then encouraged to recruit other people to join Longrich and are paid a weekly “signing fee” for signing up new members.
Members are also promised free trips, car, cellphone and house allowances as well as study opportunities for up to four of their children in China.
Members are further encouraged to buy and sell Longrich products.
“Typically, illegal financial schemes put in place an elaborate recruitment drive where a person is offered a chance to join a group, programme, team or scheme in which he/she needs to recruit new members to make money and not necessarily through the sales of products to consumers,” the bank said in a statement.
“Considering the assessment made into the affairs of the scheme, the bank hereby declares Longrich as an illegal financial scheme exhibiting undesirable practices in terms of the Act…”
The central bank has further advised members of the public not to engage in business activities of Longrich. “Should Longrich and its promoters wish to continue with the sale of Longrich products, then such products should be sold directly to customers. Products for sale should also be the primary source of income, which means the commission should be paid based on the products sold and the business practice should be sustainable without the recruitment of new promoters in the manner described herein.”