In fact, this is not the first time Baoying has been exposed to illegal direct sales and is suspected of pyramid schemes. Previously, Baoying Shanxi Branch was fined 6.5438+0.7 million yuan by local authorities for alleged pyramid selling and illegal direct selling, and Guangzhou Branch was also frozen. In addition, the whereabouts of Liu Yuwen, the former chairman of Baoying, are unknown and he is suspected to have been arrested. What kind of company is this?
Cross-regional illegal direct selling
According to the data, on July 20 10, Baoying shares obtained the national direct selling license. In August of the same year, USNA was acquired by Usana for US$ 62.7 million, and USNA is Baoying's American parent company.
Baoying is suspected of having a number of illegal direct selling businesses in China, the most obvious of which is to engage in direct selling business in non-direct selling areas. According to the information published on the website of the direct selling industry management of the Ministry of Commerce, only the branches in Beijing, Tianjin, Jiangsu and Shaanxi have obtained the approval. However, according to the data released by Baoying official website, Baoying has 29 branches in many provinces in China.
According to the Notice of the Ministry of Commerce on Relevant Issues Concerning the Management of Branches of Direct Selling Enterprises, direct selling enterprises should set up branches in provinces, autonomous regions and municipalities directly under the Central Government engaged in direct selling activities. Enterprises applying for the establishment of branches shall apply to the Ministry of Commerce through the competent commercial departments of the provinces, autonomous regions, municipalities directly under the Central Government, cities under separate state planning and Xinjiang Production and Construction Corps where they are registered. The provincial competent commercial department of the place of registration shall submit the application materials to the Ministry of Commerce within 7 working days from the date of receiving the application materials of the enterprise, and the Ministry of Commerce shall handle them according to the Regulations on the Administration of Direct Selling. It can be seen that most of Baoying's branches in China are not registered in the Ministry of Commerce, and they are privately cross-regional direct sales.
In order to further understand whether Baoying Sub-branch has any business. The reporter called Baoying's branch and learned that among the 25 unregistered branches of Baoying, several branches in Shenzhen, Shanghai and Shandong did not answer their phones or their numbers did not exist, and most of the other branches did have business.
According to the photos provided by Hu Hua to the reporter of Huashang Daily, Baoying has conducted direct sales promotion and dealer training in many branches such as Guangzhou, Han, Hefei and Chongqing.
Pictures of Chongqing dealers doing business and rewarding dealers provided by Hu Hua.
In addition, some consumers bought Baoying brand calcium plus D chewable tablets in Baoying Guangxi Branch, which is a direct selling product officially filed by Baoying in the Ministry of Commerce.
The product purchase order of Baoying Guangxi Branch also shows that Guangxi Branch, as a non-filing branch of Baoying, sells almost all direct sales products filed by Baoying.
Comparing the sales of Baoying horizontally, we can find that the sales of Baoying's branches in four provinces in China are equivalent to those of other direct selling enterprises in more than 20 provinces, which makes people suspect that Baoying is engaged in direct selling business in only four provinces in China.
According to the data, in 20 18, herbalife's sales in 28 provinces of China reached 65,438 billion US dollars, such as the sales of newly established branches in 25 provinces of China reached 886 million US dollars, the sales of branches of Infinitus in 8 provinces of China reached 206 million euros (about 230 million US dollars), and Baoying was in China in 20 18.
The company has other illegal direct selling behaviors.
In addition to carrying out direct selling business in non-registered direct selling areas, Baoying's illegal direct selling is also manifested in the direct selling business of non-registered direct sellers. According to the annual report of USNA20 18, by the end of 20 17, there were 106000 people selling Baoying's products in China, but Baoying actually announced only 223 direct sellers. Compared with other direct selling enterprises, Herbalife has more than 200,000 direct selling personnel registered in the Ministry of Commerce, such as 39,399 new employees and 54,652 infinite employees.
In Baoying's direct selling area, Nanjing, Jiangsu, a dealer named Qian Yuanyuan promoted Baoying's various products to reporters through WeChat, but the reporter found that there was no Qian Yuanyuan's name in the list of direct sellers published by Baoying. In addition, Yan Rui, who is engaged in direct selling business and claims to be Baoying's distributor in Xi 'an, is not on the list of direct sellers approved by the Ministry of Commerce.
In addition to the above violations, Baoying is also suspected of illegally selling unregistered direct selling products in China. According to the information published on the website of the Ministry of Commerce, Baoying Corporation has 36 products approved for filing, but Baoying official website has published many products. According to the reporter's investigation, Baoying Corporation has 10 products that have not been declared to the Ministry of Commerce, including Baoyingkang brand concentrated phospholipid linolenic acid soft capsules, Baoying Kang Run brand multivitamin and mineral tablets, Baoying brand probiotic powder and so on.
According to the Regulations on Direct Selling Management and Announcement No.72 of the Ministry of Commerce and the State Administration for Industry and Commerce in 2005, direct selling enterprises can sell their own products and products produced by parent companies and holding companies through direct selling. Direct selling products of direct selling enterprises can be inquired through the information system, and products that have not been audited and announced cannot be sold through direct selling.
The former president of China District was suspected of being arrested.
More seriously, the "Baby-friendly Cell Bonus System" that has been popular in Baby-friendly China District is suspected of pyramid selling. According to the reporter's understanding, the "baby cell bonus system" requires salesmen to develop two offline lines, namely two business centers. The sales of the two business centers are not equal, and the system will use the party with the lower sales of the group to calculate the commission. However, this payment method does not meet the requirements of direct selling companies to pay commissions directly to direct sellers.
The Regulations on Direct Selling Management stipulates that the remuneration paid by direct selling enterprises to direct sellers can only be calculated according to the income of direct sellers selling products to consumers, and the total remuneration (including commissions, bonuses, various forms of rewards and other economic benefits) shall not exceed 30% of the income of direct sellers selling products to consumers.
According to the Regulations on Prohibition of MLM, MLM refers to the behavior of organizers or business operators to calculate and pay remuneration to the developed personnel based on the number of personnel or sales performance directly or indirectly developed by them, or to require the developed personnel to obtain the qualification to join on the condition of paying a certain fee, so as to seek illegal interests, disrupt economic order and affect social stability.
In addition, the frequent changes at the top of Baoying China District are also thought-provoking. According to the data, in 20 14, Matthew J.Estes (Chinese name: Yi Rongji), the founder of Baoying, stepped down as the president of China, and Yang, then the vice president of Baoying, took over. 20 16 Liu Yuwen succeeded Yang as President of China District. 20 17 10, Shi Binhai succeeded Liu Yuwen. 2065438+On May 28th, 2008, Shi Binhai, the former president of Baoying China District, officially resigned for personal reasons. In four years, Baoying China District has changed four presidents.
Hu Hua told China Business Daily that Liu Yuwen, former president of Baoying China District, had been arrested by the police. Hu Hua provided the reporter with the case-handling materials of a policeman. According to the materials, Baoying promotes cosmetics and health care products online, requiring company members to pay a membership fee of 2,400 yuan or 6,000 yuan, from which developers can get a 20% commission. Liu Yuwen was arrested as the head of Baoying Company, and the filing date was 20 17, 1.
In fact, Baoying has been repeatedly exposed to illegal direct sales and suspected of pyramid schemes. According to public information, at the beginning of 20 17, Baoying Company was arrested by 13 people, and dozens of people were wanted online, and the account funds were frozen by 360 million yuan. In March of the same year, the police took away a baby company and a dozen high-level dealers from Guangzhou. Hu Hua told Huashang Daily that the nanny arrested by the police was Liu Yuwen, the former nanny of China District.
In addition, the information shows that Baoying Shanxi Branch was fined170,000 yuan by the local authorities for alleged pyramid selling and illegal direct selling. Chengdu Industrial and Commercial Department also named Baoying at the symposium of direct selling enterprises, pointing out that it has cross-regional illegal direct selling problems in Sichuan.
Regarding Baoying's illegal direct sales in China, suspected pyramid schemes, and the whereabouts of the former president are unknown, the reporter of Huashang Daily called the relevant person in charge of Baoying China District, and the other party said that there was no comment.