In your interest.
Online Personal Finance Magazine
No beating about the bush.
NMart Retail is collecting money from people under the guise of giving them an opportunity to shop at its retail chains, offering huge returns on their investment. But it admits there is no guarantee that anyone joining will make money and that its system is purely dependent on new joiners
Surat-based NMart Retails, a division of Newlook Multitrade Pvt Ltd, is running a collective investment scheme (CIS) based on the multi-level marketing (MLM) business, under the guise of selling products through its retail chain. What is stunning is that the company openly says there is no guarantee that anyone joining would make money and its system is purely dependent on new entrants expanding the chain.
Here's what the company says under the disclaimer page on its website: "The owner/owners of this website (www.NMart.co.in) inform the distributors and would-be distributors that there is no guarantee that anyone joining the system would make money. The system purely depends on the number of distributors joining the system and distributor referrals."
In addition, NMart says that the payment would not be refunded under any circumstances.
Unfortunately, no one seems to be reading the fine print on the NMart Website. Most of the new distributors are blinded, or fooled by the lure to buy daily-need items from the company's retail chain, which may or may not be there in their local area. This also means that you not only have to enrol new distributors in your down line, but also continue to buy products from the retail chain.
NMart offers a return that works out to about four times the original investment over a period of 48 months, without taking into account other income like binary, spill-over or royalties. The highest income that a distributor can earn, as presented by the company, works out to Rs48 lakh, or 873 times of the original Rs5,500 invested and this is simply not possible.
According to information available on the company's Website, anyone wanting to join the NMart Retail system or business plan, has to invest or deposit Rs5,500. The company provides 48 vouchers of Rs220 (it needs to be consumed each month over a period of four years), a 'smart' card, credit facility of Rs1,500 per month (provided you settle the bill by the 7th of the following month), and last but not the least, a bonus of Rs11,000, if at all you remain with the company (and continue to enrol new recruits and buy products from its shop) for 48 months. Not satisfied, yet? The company also promises to pay other incomes, like binary income, spill-over income, royalty and repurchase incomes.
For any two new joinees, on either your left or right leg or down line, you would get Rs600 as pair income for an unlimited depth. (But it is capped at 100 pairs, or a payment of Rs60,000 per week.) So, the company says, enrolling 8,000 new distributors below your rank can earn a binary income of Rs24 lakh. If your success percentage is just 1%, you could still earn Rs24,000 just as binary income!
It, however, does not mention that for this you still need to enrol 80 new people with an investment of Rs5,500 each, or a total Rs4.40 lakh, of which the company would pay you Rs24,000. That's about 5% only and it keeps the rest with itself! If this is not enough, then the company promises to pay you spill-over income, or Rs200, for every new joinee below your line for an unlimited depth. In addition to this, NMart also promises to pay royalty and repurchase income.
The company projects an income of Rs48 lakh for a down line of 16,000 distributors, with 8,000 associates on the left and right legs, each earning Rs24 lakh. But the next presentation slide suggests that you to do 'smart work' and instead recruit your own family members (like your spouse and your mother) instead of outsiders, to you can keep all the money (Rs48 lakh + Rs24 lakh + Rs24 lakh = Rs96 lakh) within the family!
According to Consumerfraudreporting.org, one must analyse the compensation plan to determine whether participants are paid from actual sales to customers and not from money received from new recruits. If participants are paid primarily from money received from new recruits, then the company is an illegal pyramid or Ponzi scheme, the website said. This is exactly what NMart is doing.
The company is promoted by Gopal Shekhawat, who is also said to be chairman for Asia of the International Human Rights Association. In some places, Mr Shekhawat is also referred to as being the nephew of the President of India, Pratibhai Patil, but this cannot be confirmed.
Among other promoters and officials of NMart Retail are Akil Patrawala, CEO; Pratik Desai, business head for retail; Hiren Devani, HR head; Dr Riyaz Mushrif, marketing head for network; Bharat Handifod, business head for network; Prashant More, training in-charge and Dashrath Mali, insurance in-charge.
Newlook Multitrade, the parent of NMart Retail, has its corporate office in Surat and mentions a Mumbai address in the records of the Registrar of Companies (RoC). According to information available on its Website, NMart operates around 51 retail stores across the country and plans to increase that to 135.
Some questions about NMart, put to the Securities and Exchange Board of India (SEBI) by Moneylife were not answered. In May 2011, the market regulator asked Kolkata-based Sun-Plant Agro to wind up its CIS and refund the money it had collected.
Sun-Plant Agro was raising funds in the name of 'sale of plants'. It allegedly sold plants to purchasers, maintained the plants and thereafter provided returns on the amounts invested at the end of the scheme in the form of wood, although investors were not provided any identity or reference to the particular plant sold.
SEBI said such activities had the characteristics of a collective investment scheme, as specified under Section 11AA of the SEBI Act read with Regulation 3 of the SEBI (CIS) Regulations. Sun-Plant Agro ought to have wound up the scheme in 2003 pursuant to rejection of the application for provisional registration by SEBI and the filing of the 'Winding Up and Repayment Report' by it.
"The activities of Sun-Plant Agro and the details of amounts received by it against the cost of trees from 2003 to 2010 prima facie indicate that even after submission of the Winding Up and Repayment Report in 2003, the company carried out activities of a CIS without obtaining a Certificate of Registration from SEBI," the market regulator had said.
In addition to collecting money from people, NMart also paid them commissions for recruiting new people. On the issue of MLMs, the United States Federal Trade Commission states, "Steer clear of multi-level marketing plans that pay commissions for recruiting new distributors. They are actually illegal pyramid schemes. Why is pyramiding dangerous? Because plans that pay commissions for recruiting new distributors inevitably collapse when no new distributors can be recruited. And when a plan collapses, most people-except perhaps those at the very top of the pyramid-end up empty-handed."
The government has approved new rules prohibiting offensive content on Websites. But netizens believe the laws are too strict and could be misused to target those critical of the government
New internet rules which seek to curb offensive content and help maintain national security, have been criticised by netizens as being restrictive and impinging on the privacy of individuals.
The new regulations prohibit Websites and service providers from hosting information that could be regarded as "harmful", "blasphemous" or "insulting" to any other country. Providers are expected to remove such content within 36 hours of being notified of a complaint, and search engines, Websites and cyber cafes can be held liable for such objectionable material, Rama Lakshmi reports in the Washington Post.
The new rules were put up on the government Website for public debate from February to April and have been since approved. The rules, which are to be put before parliament this month, have set off a debate over free speech.
"The sharpest and most vocal criticism of the government and the political leadership has emerged from the internet," says Rajeev Chandrasekhar, independent member of the Rajya Sabha elected from Karnataka, who is mobilising opposition to the regulations. "But now a sword hangs over these people who blog and debate freely. This is not good for a country that has a predominantly young population, expanding middle class and is turning more urban."
The new measures appear to be a part of the response to terror attacks in various parts of the country over the past few years, after investigations have found that the attackers used email and such internet services for coordination.
Internet cafes are required to install surveillance cameras and demand identification from customers. At cyber cafes across India, people surf the Web next to large signs warning that they are being monitored.
Under the new rules, cafes will also have to keep a record of each user's browsing activity and submit those records to the government every month. After attacks in Mumbai last month, police closed several small cyber cafes in nearby villages that were operating without a license.
The government's response to the criticism has been accommodative. "We believe in freedom of speech through all media, including the internet, although there are some codes of conduct that are expected to be followed by all," says Sachin Pilot, deputy minister for communication and information technology. "We have sought to balance the rights of consumers with those of service providers and other stakeholders in this space. But we must draw a distinction between freedom of expression and the freedom of expression with intent to harm or defame someone."
Internet users, bloggers and activists believe that the regulations are among the most restrictive in the world, and they say they will continue to lobby their elected representatives to raise their concerns in parliament which is in session.
Dr Sadanand Nadkarni has a number of suggestions for improving the working of the medical system, and amending current academic practices. He is waiting for the Medical Council of India to act on his proposals
The academic system for producing medical professionals still has considerable scope for improvement. For example, many doctors use advanced technology for critical illnesses, but primary healthcare still remains a largely neglected area. Again, the complete medical system needs an overhaul—cases abound where professionals refer patients to expensive therapies where a simple prescription for a normal, OTC (over-the-counter) formulation would have done the task.
So how can the medical system be put through a complete overhaul?
Dr Sadanand Nadkarni, former dean of Sion Hospital (now called Lokmanya Tilak Municipal General Hospital) spoke to Moneylife on the suggestions that he had for overhauling the Indian medical system.
Dr Nadkarni said,”The Indian healthcare system is a mall, not a shop. It is an industry of repair and maintenance of human beings.” He added that there have been a number of cases where general practitioners refer patients to expensive procedures like brain and body scans. The tendency in India, Dr Nadkarni said, is to look at a doctor as a one-stop shop where all the patient’s ailments can be attended to.”
The former dean has penned a book called ‘Management of the sick health-care system’ in 2010. He had sent this book and a letter summarising suggestions for improvement to six members of the Medical Council of India (MCI). Out of the six members only one member, Dr Ranjit Roy Chaudhary, has replied to the letter on 8 November 2010. But none of Dr Nadkarni’s recommendations have been implemented. (Moneylife has a copy of Mr Nadkarni’s book, his recommendations sent to MCI and Dr Chaudhary’s reply).
The letter has eight suggestions for the MCI. First, Dr Nadkarni suggests raising the minimum qualification to 55% aggregate and 70% in PCB (Physics, Chemistry and Biology) at HSC/premedical examinations. He believes that this will prevent incapable students from becoming doctors. In his second suggestion, he proposes to have only one CET (Common Entrance Test) at the centre and state level each which should be conducted immediately after the final MBBS exam—and not at the end of the internship. He feels that allowing private practice to senior medical teachers outside the hospital premises is disastrous.
He advises that it should be strictly prohibited and instead 25% beds in each unit should be kept for paying patients with incentive payment authorised for senior teachers.
Since these beds are a part of the same ward, students can examine these patients, which will help them learn medicine.
Hospital training is 75% of medical education—so the method in which a hospital functions assumes importance. Dr Nadkarni told Moneylife, “Hospitals should work from 8am to 3pm where incentive-paying classes should be conducted between 4pm-10pm. One unit should be divided into two sub-units including a professor/assistant professor, lecturer and three resident doctors. Also, a part-time consultant should be allowed in each sub-unit.” Dr Nadkarni says that more applications will be available for the post of full-time professor or associate professors if the above process is adopted.
He adds, “OPD (out-patient department) and emergency should be clearly divided. In order to reduce overcrowding, cases referred from primary health care centres should have separate priority and timing while those coming directly should be charged moderately.”
Dr Nadkarni urged that unless the senior staff is occupied till 4pm, the tendency to move out for private practice cannot be effectively curbed. Only doctors who show efforts in research or writing textbooks should be granted the non-practising allowance.
Dr Nadkarni said, “MBBS should be taught for three terms instead of two and there is an urgent requirement to start certification or post-graduation for general practice. The PSM (preventive & social medicine) branch (could) possibly be renamed as the health care and social medicine department and conduct the course. And the primary health care (PHC) and the PSM department should conduct a social awareness and management course throughout the internship program and post graduation course.”
He told Moneylife,”Non-allopathic doctors should be given two years’ training in district hospitals before being allowed to practice allopathy. However, MBBS and non-allopathic general practitioners should be prohibited from prescribing very costly or recently introduced antibiotics and drugs and also from advising CT scans and MRI isotope studies. Instead, they should refer such cases to consultants who should be allowed to prescribe them. A list updated every two years that provides details about very costly drugs, investigations and drugs introduced in the last two years should be made available.” This, he says, will reduce health-care costs for the common man and prevent abuse.
Apart from MCI’s Dr Chaudhary, it has been eight months since Dr Nadkarni hasn’t got a reply from the other five members.