Best World

Don't work in the attorney general office and it's not my job to determine a company's business practice unlawful or not. As a minute investor I care more about the financial results and prospects of the company. Believe the regulator will know better and the market will be the final arbitrator in the long run. Don't intend to get further embroiled in this topic. All the risks are worth noting and could well explode one day, nevertheless.

(24-07-2017, 04:48 PM)ftaalee Wrote: Don't work in the attorney general office and it's not my job to determine a company's business practice unlawful or not. As a minute investor I care more about the financial results and prospects of the company. Believe the regulator will know better and the market will be the final arbitrator in the long run.  Don't intend to get further embroiled in this topic. All the risks are worth noting and could well explode one day, nevertheless.

Does one have to work in the attorney general office in order to participate in VB - debating on whether a company’s business practice is unlawful or not?
 
As an investor, it is your job (& responsibility) to carry out proper due deligence to determine if the company’s business practice is unlawful or not.
 
You are responsible for your own investment – ultimately, it’s your call – it’s up to you as to how much resources and efforts you intend to put into the due diligence process - it’s your rights to choose what to care MORE, care LESS or DON”T care at all.
 
Potentially, good company prospects (which you care MORE about) could be transformed into good financial results ( which you care MORE about) by good business practices.
 
Potentially, good company prospects (which you care MORE about) could be ruined by poor business practices ( which you COULN"T care MORE about), resulting in disastrous financial results (which you care MORE about).
 
In a way, MORE could be LESS and vice versa

If you feel that :
-Legal issues should be dealt with and determined by lawyers.
-Regulatory issues should be de dealt with and determined by the regulators
-Market will be the final arbitrator etc
- that you don’t intend to get further embroiled in this topic.
 
Your views are respected but for those who care more on the topic, the debate will go on regardless…………………………..

Do continue to contribute on what you care MORE about...................

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(10-07-2017, 09:23 PM)Boon Wrote: I think the rules are very clear => single layer commission only. It would be too naive to assume that DS companies like BWI is not aware of the rules.........................
 
禁止传销条例 ("prohibition of chuanxiao”)
http://www.gov.cn/zwgk/2005-09/03/content_28808.htm
 
第七条　下列行为，属于传销行为：
　　（一）组织者或者经营者通过发展人员，要求被发展人员发展其他人员加入，对发展的人员以其直接或者间接滚动发展的人员数量为依据计算和给付报酬（包括物质奖励和其他经济利益，下同），牟取非法利益的；
　　（二）组织者或者经营者通过发展人员，要求被发展人员交纳费用或者以认购商品等方式变相交纳费用，取得加入或者发展其他人员加入的资格，牟取非法利益的；
　　（三）组织者或者经营者通过发展人员，要求被发展人员发展其他人员加入，形成上下线关系，并以下线的销售业绩为依据计算和给付上线报酬，牟取非法利益的
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China

Multi-level marketing (simplified Chinese: 传销; traditional Chinese: 傳銷; pinyin: chuán xiāo) was first introduced to China by American, Taiwanese, and Japanese companies following the Chinese economic reform of 1978. This rise in multi-level marketing's popularity coincided with economic uncertainty and a new shift towards individual consumerism. Multi-level marketing was banned on the mainland by the government in 1998, citing social, economic, and taxation issues.[60] Further regulation "Prohibition of Chuanxiao" (where MLM is a type of Chuanxiao, Chinese name of the regulation is 《禁止传销条例》 ), was enacted in 2005, clause 3 of Chapter 2 of the regulation states having downlines is illegal (original text from the regulation '组织者或者经营者通过发展人员，要求被发展人员发展其他人员加入，形成上下线关系，并以下线的销售业绩为依据计算和给付上线报酬，牟取非法利益的。').[14] O'Regan wrote 'With this regulation China makes clear that while Direct Sales is permitted in the mainland, Multi-Level Marketing is not'.[13]

MLM companies have been trying to find ways around China's prohibitions, or have been developing other methods, such as direct sales, to take their products to China through retail operations. The Direct Sales Regulations limit direct selling to cosmetics, health food, sanitary products, bodybuilding equipment and kitchen utensils. And the Regulations require Chinese or foreign companies ("FIEs") who intend to engage into direct sale business in mainland China to apply for and obtain direct selling license from the Ministry of Commerce ("MOFCOM").[61] In 2016, there are 73 companies, including domestic and foreign companies, have obtained the direct selling license.[62] Some multi-level marketing sellers have circumvented this ban by establishing addresses and bank accounts in Hong Kong, where the practice is legal, while selling and recruiting on the mainland.[13][63]

It was not until August 23, 2005 that the State Council promulgated rules that dealt specifically with direct sale operation- Administration of Direct Sales (entered into effect on 1 December 2005) and the Regulations for the Prohibition of chuanxiao (entered into effect on 1 November 2005). When direct selling is allowed, it will only be permitted under the most stringent requirements, in order to ensure the operations are not pyramid schemes, MLM, or fly-by-night operations.

https://en.wikipedia.org/wiki/Multi-level_marketing
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What is BWI's view on the above 禁止传销条例?

Please write to the IR, if you doubt they are not aware of the rules.

This is the rule they have to follow and would form the basis of our debate going forward...............

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These 3 videos, still accessible, should be “relevant” to prove something………………………….
 
https://www.youtube.com/watch?time_conti...dWEhkbt7Rk
 
https://youtu.be/ZQZK4RaRmtE
 
https://youtu.be/kEu9OgU6W6k

https://www.facebook.com/BWLConvention/p...=3&theater


"The Story of Chen Guan Lin has touched all of us. We feel so deeply conscious that your hard work in building up a strong network team entitle you to earn a passive income and this passive income can even extend to become a lifelong income with sustainable earnings for your family even after death."

How does the scheme work?

Where is the source of passive income?

From Dora’s speech, she attests that;
CGL joined BWL (as a distributor) 8 years ago
CGL was a leader of Chao Yue Ti Xi - the network team he built up over the years.
CGL has a PD ranking under BWL ranking system.
CGL passed away in 2016.
His family inherited his passive income generated from his network team - Chao Yue Ti Xi.
This passive income in FY2016 is so substantial -enough to qualify CGL as one of the TOP 10 earners among BWL' s distributors in FY2016.
What could this passive income be which Dora describe as better than an insurance policy?
It must be commission from sales generated from his downlines in his network, what else could it be?

If this “passive income” were indeed commission derived from sales generated by CGL’s network downlines, it is considered an act of 传销, which is illegal, under the 禁止传销条例.

If this is the case, it means the CEO is attesting to the whole world, through the video, that the Company has been engaging in illegal activities in China, am I not right?

“your hard work in building up a strong network team entitle you to earn a passive income and this passive income can even extend to become a lifelong income with sustainable earnings for your family even after death."
 
Building up strong network team is synonymous more with the multi-level-commission based DS model than the retail model.
 
“passive income scheme" implies => there must exist a contractual agreement between BWI/BWL and its China distributors under which such rights and entitlements under the scheme are clearly spelled out. These include promotion/ranking criteria and detail compensation criteria etc.....
 
But under the current export/retail model, BWI/BWL has only contractual relationship with the “Export Agent”, and not with any distributors further downstream.
 
What makes CGL qualify for such “passive income”?
 
Being a distributor under the export/retail model, has he got a formal contract with BWL?
 
Not according to IR’s replies.
 
Moreover, he is from China where 传销 is illegal.
 
Like the 663 systems, the “passsive income scheme” is designed for multi-level-commission based DS model.
 
If one looks at BWL’s export/retail operations through "a lens as if multi-level-commission based DS model is legal in China”, everything seems to work.
 
If one looks at BWL’s export/retail operations through "a lens of single-level-commission based DS model in China”,  everything makes NO sense.
 
This further reinforce the thesis that, perhaps, “the export/retail” model is just a “multi-level-commission based DS model in disguise”.
 

Millionfaith, thanks for sharing on MLM operations, based on your experience as a MLM distributor.

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http://bestworld.listedcompany.com/news....1431784589

The Board of Directors of Best World International Limited (the "Company") wishes to announce that the Company will release its second quarter financial results for the financial period ended 30 June 2017 on Monday, 7 August 2017 after trading hours.