Ideal science and technology group direct sales to pyramid schemes？ Selling regional products is suspected of violating the rules.
In official website, the Ideal Group, Jiao Jialiang’s personal profile reads, "Chairman Jiao Jialiang, researcher, doctoral supervisor, member Chinese People’s Political Consultative Conference, national model worker and visiting professor at the Party School of the Central Committee of the Communist Party of China, successfully created the world map of the’ Dragon’ enterprise."
Jiao Jialiang’s territory started with medicine and expanded with tea. Panlong Yunhai Pharmaceutical Co., Ltd., longrun tea listed on the Hong Kong stock market, Ideal Technology Group, the first direct selling tea company, Longfa Pharmaceutical listed on the New Third Board, etc.
Among them, Ideal Science and Technology Group has been controversial about "pyramid selling" since its establishment, and the company still has problems such as illegal sales. According to public reports, Ideal Technology Group had experienced major personnel unrest before, and lent out its direct sales license last year. Can the troubled Ideal Science and Technology Group still remain in Jiao Jialiang’s "Dragon" system?
Accused of pyramid scheme fraud
In 2017, Ideal Technology was jointly complained by seven dealers in Shenyang, Liaoning Province, believing that it was suspected of pyramid scheme fraud. In July of the same year, Shenyang Industrial and Commercial Bureau also visited Ideal Technology to verify the situation.
According to China Quality Miles, Liaoning Branch of Ideal Technology launched a promotional activity of returning 60,000 yuan of gold diamond cards in August 2015, promising new and old members to invest or make up 60,000 yuan at a time and become members of the gold diamond card, so that they can enjoy 18 months’ return of dividends. However, after 21 months, the maximum cumulative return is less than 10,000 yuan, at least 3,000 yuan; Even forced adjustment of the system, resulting in members can not return dividends. "Dividends will be weighted according to 1% of the company’s global performance every week until it is returned."
At the same time, according to the information provided by the complainant, around August 1, 2016, the company used a multi-level bonus payment system, and the weekly salary was settled. The dealer levels were "Puka, Silver Card, Gold Card, Diamond Card and Gold Diamond Card". After becoming a member of the company, the bonus will be settled according to the percentage of market performance, and the share ratio of each level is different, ranging from 9% to 15%.
In this multi-level bonus payment system, there are two awards similar to the MLM operation mode, namely "leadership award" and "mutual aid award". The former means that dealers need to develop for six generations and draw them by layers; The latter means that, according to the placement relationship and contact relationship of the points, 1% of the bonus for one person who takes the contact and 2% of the bonus for six layers of organizations under the contact.
In the "Mutual Aid Award", there are 2 people on the first floor, 4 people on the second floor, 8 people on the third floor, 16 people on the fourth floor, 32 people on the fifth floor and 64 people on the sixth floor (2+4+8+16+32+64=126), which adds up to 126 people, and these 126 people generate the organization bonus, and the dealer draws 2%. Ideal Science and Technology Group’s comment on this award is, "This bonus system has nothing to do with ability, performance, development, recommendation and selling goods. It can guide and create an atmosphere of mutual help from top to bottom and solve the survival of newcomers."
The "Leadership Award" and the "Mutual Aid Award" are a complete system of attracting people. The former develops the hierarchy and the latter consolidates the hierarchy. In 2005, the document "Regulations on Prohibiting MLM" issued by the State Council made it clear that "MLM is an act of obtaining illegal interests, disrupting economic order and affecting social stability by calculating and paying remuneration to the developed personnel based on the number of personnel or sales performance directly or indirectly developed by them, or requiring the developed personnel to join the qualification on the condition of paying a certain fee."
According to the information provided by the complainant, Ideal Technology Group still uses the fund system after August 1, 2016. In this regard, the "Investor Network" researcher communicated with Ideal Technology Group, but the phone was not connected.
In view of the multi-level compensation adopted by Ideal Technology Liaoning Branch, the person in charge of Ideal Technology Group has publicly stated: "The bonus system currently used by Ideal Technology Group conforms to the relevant national laws and regulations, and has been filed in relevant departments and displayed in the company’s official website information disclosure. Regarding the illegal marketing and exaggerated publicity of the system team, once the company finds out, it will directly cancel its ideal dealer qualification. If it is suspected of breaking the law, the company will also actively cooperate with government departments to be held accountable. "
Ideal Technology was questioned by Southern Metropolis Daily as a scam in the second year of obtaining a direct selling license. In December 2014, longrun tea launched a direct selling project in Dongguan, and gathered hundreds of people to explain the terms of membership. You only need to buy 12,000 yuan of products to become a member, and you can enjoy a 60% discount for sales agents. The "direct sales bonus" for introducing newcomers to join the club is directly distributed by the group company. A few years before this, longrun tea successively launched projects such as "tea speed matching" and "tea story", which were once denounced as scams by many franchisees, while the merchants were labeled as "joining swindlers".
In April 2018, Ideal Technology was exposed to lease the direct selling license to Tianjin Lilong Biotechnology Co., Ltd., which illegally engaged in direct selling activities. The person in charge of Ideal Technology responded that "(this matter) is not clear."
Illegal sales
According to the information disclosed by the direct selling industry management website of the Ministry of Commerce, Ideal Technology Group Co., Ltd. is only allowed to carry out direct selling activities in Hunan, Sichuan, Shandong and Yunnan.
According to the Regulations on the Administration of Direct Selling (hereinafter referred to as the Regulations), direct selling enterprises must set up branches in the provinces, autonomous regions and municipalities directly under the Central Government that intend to engage in direct selling activities, and set up service outlets in the areas where they engage in direct selling activities, which are convenient for consumers and direct sellers to know product prices, return goods and other services provided by enterprises according to law. "Direct sellers only carry out activities in areas where service outlets have been established in the administrative areas of provinces, autonomous regions and municipalities directly under the Central Government where a branch of an enterprise is located." It is clearly stated in the regulations that "direct sales business shall not be carried out in areas that have not been audited and announced."
According to the regulations, Ideal Technology Group Co., Ltd. shall not carry out direct sales activities in four places except Hunan, Sichuan, Shandong and Yunnan. However, it is understood that Ideal Technology Group has the phenomenon of illegal sales of direct sellers in Jiangsu, Henan and Liaoning. Among the information published on the direct selling management website of the Ministry of Commerce, Ideal Technology Group Co., Ltd. has only 34 registered service outlets.
In addition, the number of products registered by Ideal Technology Group is 3 categories, including 43 saleable products, covering 34 kinds of tea cosmetics, 7 kinds of tea cleaning products and 2 kinds of tea health products. Ms. Qin, a distributor of Jiangsu Ideality Science and Technology Group, currently sells 8 categories of products, including 12 kinds of health care products.
In addition to Yunzhinan brand Tangzhian capsules and Longrun brand Runshu tea, the company also sells health care products Ideal Longfa Sanqihua Sweet Sleeping Tablets, which is a joint product of Longrun Group’s New Third Board Longfa Pharmaceutical Company and Ideal Technology Group, and is mainly suitable for people with poor sleep quality and poor quality. In order to find out the relevant information of this product on the official website of the State Food and Drug Administration, the pharmaceutical industry said that this means that this product is a "three no products".
According to the company’s propaganda, the ideal Longfa Sanqihua Sweet Sleeping Tablet is a herbal formula, and its main components are Sanqihua and γ-aminobutyric acid. The former "clears liver-fire, calms sleep, effectively shortens sleep time, prolongs sleep time and reduces awakening times", while the latter "promotes brain energy metabolism, improves nerve function and thus improves sleep".
People in the pharmaceutical industry said, "First of all, Chinese medicine is the most personalized, and now it is advertised that anyone can use it, which is misleading; A prescription that can benefit at most 20% of the people in the crowd is already a good prescription; Panax notoginseng and γ -aminobutyric acid can help sleep, but long-term use will definitely have side effects. The effect of sleeping well should be tested clinically and analyzed statistically, otherwise other tests are not convincing. " Investor.com made a telephone interview with Yunnan Longfa Pharmaceutical Co., Ltd. on the drug-related issues, but the company’s public announcement in official website of the CSRC was not answered.
According to the direct sales network, in 2016, Ideal Technology exposed personnel shocks. Shan Duanfeng, Executive Dean of Ideal University Direct Selling College, Director of Ideal South China Region, Shi Zhenli, Manager of Ideal Guangdong Branch, Li Wei, Deputy Manager of Shandong Branch, and Li Zhixing, Deputy Manager of Guangdong Branch resigned or left one after another; In August of the same year, Chen Lina, the founder of Chuanhongsheng System, was blocked, and Hongsheng System was dissolved, which had contributed 70% of the performance of Ideal Science and Technology Direct Selling Plate. Despite this, according to the statistics of professional organizations, the sales of ideal technology still reached 970 million in 2017, ranking 27th among mainland direct selling enterprises.
Since then, the former director of the first president of Jiakangli (China) and the assistant dean of the business school of the former (Suzhou) Green Leaf Commodity Co., Ltd. have served as the assistant chairman, executive director and dean of the direct selling business school of Ideal University.
At present, the company has not disclosed the total sales in 2018, but the controversial "Ideal Technology Group", as the first direct selling enterprise in the central and western regions, can be regarded as another famous brand in the "Dragon" series created by the actual controller Jiao Jialiang, following Panlong Yunhai Pharmaceutical, longrun tea and Longfa Pharmaceutical, and the result is still unknown. For the above related situation, Investor Network will continue to pay attention.
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