Dubious chain business

Dubious chain business

From Tempo

Recently, a friend of mine asked me to attend a business
presentation on a people's welfare program held by PT Artha Utama
Mulia Kesra on the 12th floor of the Menara BTN Building, Jl.
Gajah Mada, Jakarta (now on Jl. Balikpapan Raya, Central
Jakarta). The gathering was crowded and after the presentation
was over, I was puzzled as there was no business element in what
had been presented.

The management of the company said that this program was a
multilevel marketing business entirely owned by the participants.
I once read a book on multilevel marketing by Andreas Harefa and
I was also once a distributor for an MLM company. As far as I
know, a sound company practicing multilevel marketing has a
special business license and products or services to market.
Under such conditions, all its members will then have an equal
chance of success. In reality, PT Artha Utama Mulia Kesra has
none of these.

Under this program, a member will transfer Rp 25,000 to five
people and Rp 50,000 to the company, after which the company will
give him 15 forms for the recruitment of new members. Under this
system, people at the lowest level will have to pay a certain
amount of money to those who registered earlier, so only they
will enjoy greater benefits.

In my opinion, this business is not a multilevel marketing
business, but only a kind of a chain arisan (a gathering in which
members contribute to and take turns in winning an aggregate sum
of money). The company collects funds from the community, but it
is not actually a financial institution.

My question is why this business practice, which is prone to
fraudulence, is allowed to go on. Shall we allow practices like
the Danasonic arisan, Pentagono and the like to recur?

BOBBY P. ARIYANTO, Jakarta