bdnews24.com senior correspondent
Dhaka, June 20 (bdnews24.com) — A draft law on multi-level marketing or MLM has been formulated with provisions of jail, fines and ban from entering 21 types of businesses.
The draft ‘Direct Sale (MLM) Law 2011’ will soon be uploaded to the commerce ministry website for public opinion, a member of the committee involved in formulation of the law, told bdnews24.com on Monday.
Responding to complains that unregulated direct sale and MLM businesses were defrauding many of their savings, a 17-member committee headed by additional secretary M Murtaza Reza was formed in March.
After a meeting on Monday, committee’s member secretary Nazmul Ahsan Majumder told bdnews24.com, “Direct sale law has been drafted. It will be put up on the website within a day or two.
“Opinions will be accepted for 15 days and reviewed. If necessary, we will include the recommendations in the draft. Hopefully we’ll be able to finalise the draft within August,” he added.
Bangladesh Bank on Jan 9 warned in a circular against investing in MLM companies that offer abnormal profits in a short span of time.
It said investors could get deceived by these companies that come up with schemes offering 10 percent or more profits a month upon investments in gold markets abroad or foreign exchanges.
The Anti Corruption Commission (ACC) filed cases against several companies and the central bank stopped their operations.
MLM businesses are registered with the Register of Joint Stock Companies and Firms.
In March, the commerce minister told parliament there were 62 registered MLM companies operating in the country. He added that the government knew the number of clients of only one of them, Destiny-2000, which is around 4.5 million.
Commerce ministry sources said the draft MLM law recommends a directorate headed by a joint secretary to regulate the businesses.
It recommended mandatory licensing and registration. Companies would be banned from 21 businesses such as unreal or unsubstantial products, trees and land, and lotteries.
It recommended that all crimes under the law will be non-bailable, and suggested various terms and fines as penalty.
The government has no accounts as to the business volume of the MLM companies.