Exposing the "multi-level" scheme of New Star International Corporation: Early prevention of illegal acts

(Baonghean) - Finally, we met the General Director of New Star International Joint Stock Company - Mr. Nguyen Tuan Lan; and what we heard and saw from this meeting further confirmed that New Star International Joint Stock Company had violated the law, requiring the authorities to promptly investigate and strictly handle the case according to regulations...

Ambiguous behavior

At exactly 2:00 p.m. on July 30, we returned to the headquarters of New Star International Corporation. After waiting for more than 30 minutes, "businessman" Nguyen Tuan Lan was still not present. Ms. NVA continued to call, and the meeting place was changed by him, to Alley 20, Nguyen Chanh Street... Arriving at Alley 20, we were greeted by a man about 50 years old, elegantly dressed. He was "businessman" Nguyen Tuan Lan. Perhaps thinking that we were in Ms. NVA's "line", he immediately tried to explain the company's difficulties to seek sympathy. That it was because "the person in charge of distribution embezzled billions of dong", "I am trying to equitize the company to restore it". When Ms. NVA bluntly talked about the bad treatment of the company, and even the "General Director" towards her; At the same time, he clarified that the company violated the contract and asked for a refund, but he replied vaguely that he would "have the staff check again".

Employees of New Star International Corporation (left) are persuading people who come to question the company's violations of commitments.

When we expressed "concern" about the quality of functional foods, the organization of multi-level sales contracts without a license... "businessman" Nguyen Tuan Lan said "in just a few days, the Ministry of Trade will issue a license"; and "the company's current difficulties are only temporary and will be resolved". We immediately told him that he was a press agency person, when receiving the news from Ms. NVA, we should go to Hanoi to verify; from the sweet exchange, "businessman" Nguyen Tuan Lan turned quite cold: "The guys above are very supportive of me. I have many relationships with press agencies, including the police newspaper. If you write an article, I will sue... The employees at the company who talked to you without permission, I will fire...". However, with Ms. NVA, his voice dropped: "Now you return to the company headquarters, I will call the staff to have them review your "system". I promise, I will solve the problem you suggested...".

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Returning to the headquarters, the staff of New Star International Joint Stock Company wrote a confirmation letter to resolve Ms. NVA's request to withdraw the code. The confirmation letter stated: "Today, July 30, 2015, New Star International Joint Stock Company has received Ms. NVA's request to withdraw the code from the system, address...; phone number... Number of participating codes: 27 codes. Total participation amount: 240,300,000 VND. Amount advanced: 15,000,000 VND. Remaining amount: 225,000,000 VND. After receiving Ms. NVA's request (with a specific list attached), the company scheduled that by August 15, 2015, the company will have an official response to Ms. NVA regarding the request to withdraw the system code, and will also notify the specific schedule to resolve the payment amount to withdraw the code for Ms. NVA." On the confirmation paper, "businessman" Nguyen Tuan Lan signed and stamped. Showing us the confirmation paper, Ms. NVA said: "Now I just hope to get my principal back, I don't need any commission or bonus anymore. I will stay away from this multi-level marketing business forever...".

Certificate of New Star International Corporation on the settlement of withdrawing the code of Ms. NVA

On August 14, 2015, Ms. NVA went to Hanoi again in the hope of being refunded by New Star International Corporation. When she arrived at the headquarters, it was closed. Over the phone, Ms. NVA was invited by "businessman" Nguyen Tuan Lan to a coffee shop in lane 20, Nguyen Chanh street to settle some business, and did not forget to remind her "you can only go alone". Here, after "sharing" and "sympathizing", he promised that by early September 2015 he would "resolve some money".

On August 22, during a business trip to Hanoi, we continued to the headquarters of New Star International Corporation to get more information. At this time, around 10 o'clock, here, besides the janitor busily cleaning the floor and the girl sitting in the office chair engrossed in playing a video game on the computer, there were also 2 elderly people, 1 male and 1 female with a bewildered look, when asked, they said they came to ask the company about the "regime". The man named Nguyen Van Thao, a retired cadre currently living in Tam Nong district, Phu Tho province, has participated in multi-level marketing for only a few months, built a "network" of 5 people, paid in "quite a bit", but has not received any "commission" as promised by the company. The woman, named Tran Thi Van (also living in Tam Nong district), is a trader, joined the "network" before Mr. Thao for a while, so the "network" has more than a dozen people. Ms. Van said she had received 5 million VND in "benefits", but it was not worth much compared to the amount of money she was entitled to according to the signed contract.

Our conversation was interrupted by an employee named Le Quyen, who introduced herself as the director's representative to receive guests. According to Le Quyen, the General Director is currently absent because he is planning to hand over to another board of directors; in about 15 days, New Star International Corporation will hold a shareholders' "conference"; after that, the company will have a new board of directors with enough talent and virtue, and "the distribution of goods from Hanoi to the localities will be consolidated and will certainly operate better...". Quyen said: "Everyone should be patient to create conditions to help the company overcome this difficult period...". Hearing that, Mr. Thao appeared annoyed: "I have waited too long, the company has promised many times"...

Authorities need to take action soon

According to the Chief Inspector of the Nghe An Department of Industry and Trade - Mr. Nguyen Trong Luong, the Competition Management Department - Ministry of Trade is the agency that conducts appraisal and grants licenses to organizations and units that have multi-level business needs. On the Competition Management Department's information page, there is indeed a lot of related information. For New Star International Joint Stock Company, in January 2015, the file was being appraised; in April 2015, the file was returned; and on August 10, 2015, the file was under appraisal again.

In order to improve the effectiveness of state agencies' supervision of multi-level marketing activities, and at the same time, to protect multi-level marketing participants from fraudulent and profiteering acts, on May 14, 2014, the Government issued Decree No. 42/2014/ND-CP on the management of multi-level marketing activities; On July 30, 2014, the Ministry of Industry and Trade also issued Circular No. 24/2014/TT-BCT detailing the implementation of a number of articles of Decree No. 42/2014/ND-CP of the Government on the management of multi-level marketing activities. According to Decree No. 42 and Circular No. 24, units and organizations are only allowed to conduct multi-level marketing activities when they are assessed and granted a certificate of registration for operation by the Ministry of Trade; Multi-level marketing enterprises are strictly prohibited from: requiring people who want to participate in multi-level marketing to pay a certain amount of money, deposit money, or buy a certain amount of goods in any form to be eligible to participate in the multi-level marketing network; Providing false or misleading information about the benefits of participating in multi-level marketing, the nature and uses of the goods operated by multi-level marketing enterprises to entice others to participate in multi-level marketing...

With the provisions clearly stated in Decree No. 42 and Circular No. 24, it is affirmed that New Star International Joint Stock Company has violated the law. Functional foods are related to human health, so they are regulated as conditional business items. The types of functional foods that New Star International Joint Stock Company is trading (such as the products that Ms. NVA is keeping) are introduced as imported from the US, but the labels are of some kind and some kind, therefore, they are of unknown origin and do not guarantee quality. The fact that New Star International Joint Stock Company uses the trick of profit to attract people without knowledge to participate in trading functional foods is also condemnable. And, the act of not returning the products, not paying those who participate in purchasing product packages of New Star International Joint Stock Company, in addition to violating the economic contract signed by the two parties, is also an act of appropriation of property. Therefore, relevant agencies need to take measures to stop the illegal acts of New Star International Joint Stock Company. In particular, the provincial Department of Industry and Trade needs to request the Competition Management Department - Ministry of Industry and Trade to consider and stop the appraisal of the dossier to grant a certificate of registration for multi-level sales activities for the above company, at the same time, based on the provisions of the law to handle violations; legal agencies need to clarify and strictly handle the acts of deception and appropriation of money by New Star International Joint Stock Company against those who have been lured into participating in the multi-level sales network.

Nhat Lan - Viet Long