Malaysian MLM company ‘offers’ 200% returns in 10 months via gold trading in India
Moneylife Digital Team 18 August 2010

A gold-trading company that claims that it ‘earns’ 6% margin per month is ‘offering’ 200% returns to unsuspecting people from the North East.

It looks like multi-level marketing (MLM) companies from India are not doing their job well enough in duping gullible people. Now surface reports of a company, which claims to be a subsidiary of a Malaysian company, and is spreading its wings in the North East.

The company, UniPay2U, says it is a gold-trading company, promoted by Malaysia-based Best Genius SDN BHD. UniPay2U, which has its registered office in Bengaluru, is offering 200% returns in just 10 months on gold investments. According to the company site, anyone can join its business plan by investing a minimum of Rs15,000 for buying 10 units to a maximum of 150 units at Rs2.25 lakh.

Besides two options, retention and non-retention, it also offers referral awards. In the retention plan, the customer can buy gold but is promised actual delivery after six months. He, however, is promised a 2.5% interest on his investment. Unipay2u offers redemption of gold after six months through a multinational bank, if you are from the North East. In the non-retention plan, the customer buys the gold but never gets its possession. Instead, he is offered 20% interest per month for 10 months along with 10% of his original investment amount. In short, the customer is promised 200% return on his investment in just 10 months.

The question is how can the company offer such a huge return — that too through gold trading?

According to some blogs run by Unipay2u's agents, the company buys 24-carat gold and converts it into 22-carat gold at its own factory outlet and in the due process gains 60 grams of gold on every 1kg. Since the company is a gold-trading licence holder, it gets triple credit every week from the market, it claims. So on buying 1kg of gold, it gets 3kg of gold as credit for each week. So, the 60 grams per kg it gains every week, gets converted into 240 grams of profit per week or 96% (24%x4, as per the blog). In addition, the company is paying its customers, sorry, investors, just 20%-23%.

First of all, this method of converting 24-carat gold into 22-carat gold and then earning huge money is dubious. If this is the way to earn huge profit, then all the goldsmiths and jewellers would not have taken the pain to set up big, spacious shops for selling jewellery that mostly is made with 22-carat gold.

Secondly, even if you buy 10 units of gold for Rs15,000 as of today after six or ten months, its price may go up or down. In case it goes up then Unipay2u may earn a profit but in case it goes down, then why would the company bear the loss, wouldn't it pass it on to investors?

Another interesting point is the company claims that it stores investors’ gold in professionally recognised bullion storage facilities in Switzerland, the UK or the US. Does this mean that, in case an investor wants possession of his gold after six months, he will have to get it from the safe deposits or will the company deliver it without paying any tax or duties while importing the same?

Last year, the Reserve Bank of India (RBI) restricted all miscellaneous non-banking financial companies from collecting funds from the public. However, Unipay2u says that it’s not a non-banking financial institution but is engaged in trading activities. It says it is not accepting deposits from the public but membership fees for trading.

Here is what Unipay2u says about the RBI notification. “M/s Unipay2u Marketing (P) Ltd, is not a non-banking financial institution; but is engaged in trading activities. The company is not accepting deposits from the public. As per Section 45-I (bb) (v) of the Reserve Bank of India Act, 1934, the membership fee accepted by the company as per the schemes of gold trading cannot be termed as public deposits. Further, as per Section 45-I (c) (vi) (b) of the Reserve Bank of India Act, 1934, the company cannot be termed as a banking financial institution. In the light of these statutory provisions, the notification issued by the RBI is not applicable to the company."

In short, this means neither is Unipay2u regulated by any authority, nor is it answerable to any regulator.

Further, in order to create an environment of credibility and assure customers, the company website contains ‘https’ (more secured) format instead of the usual ‘http’ format, and claims to be secured by SSL. The protocol, ‘https’ or ‘hypertext transfer protocol-secure’, is used by entities to denote secure e-commerce transactions like online banking.

2 years ago
I m interest
Monjul Islam
1 decade ago
I have paid some money as member to through local agent. Interestingly I am not getting online transfer of my monthly rebates (as they promised) since October 2010, instead the CEO of the company has given a messge saying that the company will settle all payments withing 31st of Januwary 2011. Earlier they promised to settle by November 2010, then again on December 2010.

Now, I have serious doubt that the company may fool its lakhs of members and agents and will vanish.

Can any body suggest how the members and agents can proceed for legal action against the company in case the company do not pay dues to its members and its agents???
1 decade ago
do u hav any govt assurence?
Raman Khandelwal
1 decade ago
I want to know about the facts of the trading what so ever at present doing in the international market.
1 decade ago
why the govt of India is not taking any strict action against this MLM companies...why? Are the govt waiting to see the scame?
1 decade ago
Hi Every one
I gone through the advertisement , its really a good business program. but i have some doubt about this plan, so if anybody clear me the details how they give me the huge amount. So plz try to clear me
Thanking you
1 decade ago
Replied to PRATUL comment 1 decade ago
no gurantee as same as when you invest in share market, who takes responsibility, high risk high gain, it is a multi-level marketing co, worldwide, it is not responsible only for govt. of india, if escape from india, what about rest of the world? money is backed by gold
1 decade ago
good business,
1 decade ago
seen the advertiment if it is happaning hope every will control over the inflation in Inda.

Very Good Scheme,
Sanjay Pal
1 decade ago
IUnipay2u is not offering 20% interest per month but cipal amount. It is offering 20% rebate including pirnciple amount. The actual offering interest is approximately 8.5 %. per month.
Mohammad Samad
1 decade ago
What is the surety that company will give 200% return in 10 month
Mohammad Samad
1 decade ago
What is surety that company will give 200% return in 10 month.
sushil debbarma
1 decade ago
for how many years this company has taken registration in india
Replied to sushil debbarma comment 1 decade ago
Almost 2 years
1 decade ago
This is obviously a ponzi scheme. Why is no one pursuing prosecution?
1 decade ago
Most of the indians are greedy and uneducated. More over goverment of India is with fraudulent companies and not with the masses, else all this fraud not possible.
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