In your interest.
Online Personal Finance Magazine
No beating about the bush.
The company had a typical MLM business model and claimed income after one became a distributor; it used Oommen Chandy’s picture, taken during a casual meet, to attract prospects
Money-chain and multi-level marketing (MLM) schemes keep coming up, and all of these fraudulent schemes sport some unique model to gain legitimacy. But all of them have a typical MLM business model, which is not sustainable in the long run. Take the case of Royal Life, an MLM company based in Kerala (it has shut shop now). But potential ‘investors’ were lucky—Royal Life was operating in a state where investigating agencies have banned many such similar companies, and this one was no exception.
Moneylife has learnt that Royal Life had used the picture of Kerala chief minister Oommen Chandy to promote its MLM scheme, ostensibly to try to exhibit its political clout. But in reality the story was different.
According to a source based in Kerala, who spoke to Moneylife preferring anonymity, “The company officials met Oommen Chandy with the help of a local Congress leader. They (the officials) posed for a photo; this was being used to lure innocent people who ultimately became victims to the chain fraud of Royal Life.”
Royal Life claimed to be a promotional arm of ALGA Marketing Pvt Ltd, which it said was a “unique and innovative marketing plan.”
It is also reliably learnt that the company shut down after police action. Moneylife has earlier reported on how investigating agencies in Kerala were coming down heavily on money chain schemes mushrooming in the state. (Kerala gets tough with money swindlers and MLM companies ).
The business plan of the company was an MLM business model. One had to become a distributor of its products and earn income under various heads. The company claimed, “When you become a Royal Life Distributor, you can share this business opportunity with your friends or relatives, for which Royal Life rewards you with five streams of income (such) as Binary Income, Referral Income, Royalty Income, Royal Performance Bonus and Residual Income.”
In its product range, it displayed various products ranging from facial creams, energy pendants, balms and bracelets. The cost ranged from Rs1,000 to Rs12,800. On getting two more people to become distributors, the company was to pay binary income of Rs1,000 for each pair. This would have increased as more people join. Similarly, 10% of the ‘pair’ income was supposed to be earned by every distributor as ‘referral’ income, which also had no ceiling or capping. Then there was a Royal Performance Bonus to top it all, after 15 pairs were enrolled in three weeks coupled with ‘residual income’.
Of course, Royal Life had a huge product portfolio. It claimed to be operating in the e-commerce business, mainly selling medicines for cholesterol, diabetes and obesity—among other ailments. Now thanks to the Kerala police authorities, Royal Life has got a royal boot. But what about the numerous other chain-marketing, MLM and Ponzi schemes which continue to thrive all across the country?
Making fuel from ethanol based on corn consumes more energy than it produces
Remember ethanol-based fuel which was supposed to transform the lives of US consumers? The Bush administration pushed to achieve energy independence by subsidising production of alcohol from US-grown corn. Barack Obama took it even further, supported by venture capitalists. It would have made sense as a business, but scientists told policymakers that if all the upstream and downstream costs of making ethanol were included, the process consumes far more energy than it produces! Ethanol also demands large amounts of fresh water and water is a precious resource, warn some. Apparently, someday water will become more valuable than the oil that ethanol is supposed to replace.
How big has the US ethanol industry grown in a short period, based on the support of politicians and policymakers? Consumption of corn for ethanol has soared from 1.6 billion bushels in 2006 to about 4.3 billion bushels this year—an increase of almost 200% and the share of the total US corn crop utilised for the purpose has skyrocketed from 14% to 33%. Corn grown for ethanol now takes up 10% of the arable land in the US.
What has the impact of ethanol from corn been on food prices? Corn is trading at $6 translating into higher prices for food manufacturers and the cattle industry—and, in turn, for the poor. If there is a global food crisis, corn prices, thanks to diversion of corn for ethanol, would have played a role.
Can logic and reason come into play? Not when the politicians are involved. Iowa has an early primary in the US presidential elections, giving it a huge influence in selecting candidates; it has two crucial Senate seats as well. Obama needs Iowa even more than Bush. Iowa democrats are ahead 4-3 in the House, and have a tie in the Senate (1-1), so the ethanol programme prospers.
Indeed, the ethanol industry in the US may have become so big that it now can unleash an army of lobbyists to retain the subsidies and tax-breaks that various agricultural committees are recommending.
Former senior bureaucrat EAS Sarma urges MoEF to take action, or says that concerned files may disappear. He has also filed an RTI application. These environmental violations have taken place in coastal regulation zones, but ‘deemed’ permission has been obtained from authorities
Former power and finance secretary EAS Sarma, has asked the environment ministry to take action against alleged land-grabbing by some Andhra Pradesh ministers and bureaucrats in the coastal regulation zone (CRZ) area of Vishakhapatnam. Dubbing the incident as the second ‘Adarsh’, Mr Sarma has expressed his apprehension that the documents in this case too, can go missing.
“This is a case of land grab by some persons in collusion with a state minister and some senior IAS officers who, in turn, received illegal gratification by way of posh apartments allotted in the illegal multi-storeyed complex built near RK Beach at Visakhapatnam. This scam has all the attributes of the infamous Adarsh Housing scam of Mumbai,” Mr Sarma told Moneylife. The properties have got ‘deemed permission’, despite the controversy.
Mr Sarma had also earlier written to the Andhra Pradesh state secretary, citing a series of violations which had made the occupation of CRZ land possible. He had also asked to preserve the files related to this issue, but is afraid that his request has not been given due importance. “I am writing this letter specifically to remind the state government of my apprehension that the relevant files of the state revenue department, chief commissioner of land administration (CCLA), registration department, the offices of district collector, commissioner, Greater Vishakhapatnam Municipal Corporation and Vishakhapatnam Urban Development Authority will be destroyed and tampered with as it has transpired in the case of the Adarsh Housing scam,” Mr Sarma has written to the state secretary.
Mr Sarma alleges that some politicians and bureaucrats have been granted land at prices below the market rate; and the properties have been undervalued to evade tax. He said that it is better to have some independent investigating agency like the CBI (Central Bureau of Investigation) to probe the irregularities.
Mr Sarma wrote to T Chatterjee, secretary to the Union ministry of environment and forests, “I am surprised that MoEF has not yet issued a notice to state authorities on the CRZ violation involved in this case.” He said that he has enough documentary evidence against the accused to prosecute them. He had also filed an RTI (Right to Information) application with the state revenue department, but his queries have gone unanswered so far.