Guest Contributor | Jul 29, 2020 | 0
Central Bank declares Longrich an illegal financial scheme
Following investigations into the business model and activities of Longrich Bioscience, the Bank of Namibia concluded that the activities of Longrich contravene Section 55A of the Banking Institutions Act, thus declaring it a scam.
As the core activity of Longrich, new members of the public are introduced to the business practice, whereby participants are encouraged to introduce three new members to the scheme to supposedly buy products and earn monetary rewards and progress in status. As a result, from level two upwards, the initiating member does not have to recruit new members, but he/she will benefit from the contribution of the new members subsequently joining under him/her.
“Due to the fact that 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. 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,” Kazembire Zemburuka Deputy Director: Corporate Communications at the central bank said.
Zemburuka stressed that promoters of Longrich have been directed to cease their operations immediately and failure to do so, the bank will take further appropriate action against any promoters, as stipulated in the Act.
“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,” Zemburuka added.
Members of the public are cautioned not to engage in business activities of Longrich and further those who have joined with the aim of earning profits through the recruitment of new members are urged to stop their membership with Longrich with immediate effect.