Longrich ordered to cease operations

15 April 2019 | Banking

The Bank of Namibia (BoN) has declared Longrich Bioscience an illegal pyramid scheme and ordered all involved to cease operations immediately.

A statement issued by the BoN on Friday said its assessment found that the Longrich business model contravened section 55A of the Banking Institutions Act.

“The BoN hereby declares Longrich as an illegal financial scheme exhibiting undesirable practices in terms of the Act.”

The BoN added that the promoters of Longrich were directed to cease their operations immediately. Failing that, the bank would take appropriate action against them as stipulated by the Act.

The bank warned the public not to engage in business activities with Longrich.

“Those who have joined with the aim of earning profits through the recruitment of new members are urged to stop their membership of Longrich with immediate effect.”

The BoN found that the business model's reliance on money paid in by new recruits rendered the scheme “unsustainable and will result in participants, especially those at the bottom of the scheme, losing their money”.

The BoN concluded that “it is impossible for Longrich to deliver on the promised rewards and operate successfully without the regular inflow of joining fees obtained from newly recruited members.”

Namibian Sun reported in January that Longrich was a Chinese company that required new members to pay a minimum of

N$1 000 into a local business account. They were then encouraged to recruit other people to join the scheme.

Members were promised free trips, car, cellphone and house allowances, as well as study opportunities for up to four of their children in China.

Members were further encouraged to buy and sell Longrich products.

The BoN's assessment found that commission for members was not paid on products sold, but was based on the number of people directly recruited and those who subsequently joined under their recruits. As more people joined under the initiator, a participant moved up the hierarchy and earned more “commission”, which was payable every Friday to qualifying members.

The BoN said the business practice of Longrich requiring people to recruit others with a promise of earning commission contravened the Banking Institutions Act.

The bank also found that the sale of Longrich products was not mandatory.

“The marketing strategy focuses mainly on the recruitment of new members as the primary source of income, as opposed to the sale of Longrich products. As a result, the promoters of Longrich mainly focus on recruiting new members.'

The bank said should Longrich and its promoters wish to continue with the sale of products, these products should be sold directly to customers.

Products for sale should be the primary source of income, which means commission should be paid based on the products sold. The business practice should be sustainable without the recruitment of new promoters.


Similar News


Berry’s hard work pays off

2 days ago - 13 September 2019 | Banking

Evany van Wyk Establishing good relationships with clients and becoming a connector of positive change are among Johan Berry’s future plans. His vision is...

Berry’s hard work pays off

2 days ago - 13 September 2019 | Banking

Evany van Wyk Establishing good relationships with clients and becoming a connector of positive change are among Johan Berry’s future plans. His vision is...

If ‘positivity’ were a person

2 weeks ago - 30 August 2019 | Banking

EVANY VAN WYK Stephanie Viljoen wakes up every morning with the hope that she will impact somebody’s life and that they will be inspired by...

Zero maintenance bank account launched

3 weeks ago - 21 August 2019 | Banking

With Nedbank Namibia’s recently launched Pay-As-You-Use account, clients of any age or income group pay bank charges only when they make a transaction.“We are excited...

Passionate about business

1 month - 16 August 2019 | Banking

Having started at Bank Windhoek in 2006 as senior account executive, Lukas Nanyemba was driven by his passion for business over the years, leading him...

Top-rated money app launched

1 month - 06 August 2019 | Banking

Nedbank took the next step in its digital banking evolution by launching its top-rated Money App technology in Namibia. According to the bank, the new...

N$21bn oil refinery mooted

1 month - 02 August 2019 | Banking

Russian energy company Comsar, owned by billionaire Rashid Sardarov who was last year controversially granted a 99-year lease for four farms he purchased and then...

Blockchain launches cryptocurrency exchange

1 month - 01 August 2019 | Banking

Gertrude Chavez-Dreyfuss - Blockchain, one of the world's largest digital currency wallet companies, announced on Tuesday the launch of a cryptocurrency exchange called The PIT...

Accessibility made easy

1 month - 26 July 2019 | Banking

Justicia ShipenaOn 19 July, Sanlam officially opened its new offices in Windhoek. The office is located at Wanaheda in Katutura along Independence Avenue.According to Sanlam...

Being unapologetically you

1 month - 19 July 2019 | Banking

Mariselle Stofberg Adriano Visagie went from playing in the dusty streets of Katutura to becoming a powerhouse in the entertainment industry and has created...

Latest News

Great risk, great reward

2 days ago - 13 September 2019 | Business

Evany van Wyk In only three years, Braam Vermeulen and his two other founding partners...

Once bitten, twice shy

2 days ago - 13 September 2019 | Economics

The Government Institutions Pension Fund says it cannot guarantee the success of its unlisted investment scheme but has taken precautions to ensure that it does...

Rape: No means no

2 days ago - 13 September 2019 | Crime

Police chief Sebastian Ndeitunga yesterday underlined a woman's right to say no and urged Namibians to band together to end the epidemic of violence by...

Perseverance and a good attitude...

2 days ago - 13 September 2019 | Business

Evany van Wyk Growing up in the small town of Rehoboth, Chantell Engelbrecht longs for the times she used to play street soccer with her...

Fear is not a factor

2 days ago - 13 September 2019 | Business

Michelline Nawatises Primus Shaapopi was born at Eenhana in the Ohangwena Region. For 17 years, he was raised as a Catholic by his grandmother at...

Self-motivation and teamwork

2 days ago - 13 September 2019 | Business

Mariselle StofbergEvery new challenge can translate into a learning experience, which helps Natalia Simon gain deeper knowledge of my profession.Simon has never allowed the challenges...

Adding value to the equation

2 days ago - 13 September 2019 | Business

Evany van Wyk Born and raised in Oranjemund in the //Karas Region, Marisol Basson attended high school in South Africa. She decided to study marketing...

SOEs a burden - Jooste

2 days ago - 13 September 2019 | Government

Public enterprises minister Leon Jooste says state-owned enterprises in Namibia, with the exception of a few, have failed to optimally deliver on their mandates.“In some...

Let's talk about sex

2 days ago - 13 September 2019 | Opinion

Teen pregnancy in Namibia remains a rising concern. The high teen pregnancy rate has also resulted in many girls dropping out of school to stay...

Load More