HK-based Nepalis at risk of losing Rs 2b

HONGKONG, MAY 05 - Hong Kong -based Nepalis are at risk of losing around Rs 2 billion as one of the three multi-level marketing (network marketing) companies, in which they had invested, has gone bankrupt, while the two have not paid back money for the last several months.

Around 1,000 Nepalis here have invested an estimated Rs 2 billion in the three companies — RSE Bid, Better Living Global Marketing and KaChing Holdings Limited. Among the three, RSE Bid, which had come into operation just five months ago, has gone bankrupt.

RSE Bid has collected an estimated HK$ 7 million (around Rs 86.6 million) from 300 Nepali members. In a statement to the police, the proprietor of the company, who is now in police custody, has expressed inability to pay back the money.

Better Living and KaChing are still in operation, but are crisis-ridden. Better Living came into operation about one and half years ago, while KaChing was established nine months ago.

Jayanti Rai, who runs a hotel at Chim Sa Choy, said she had invested around HK$ 316,000 in RSE Bid and KaChing. “Enticed by the promise of better returns, I invested the money,” she said, adding she has been frequenting KaChing’s office at Cantone Road for the last three months to recover the investment, but to no avail. The company initially paid back investors within just two weeks of investment by adding dividends.

Ram Karki, another investor of KaChing, has lost HK$ 388,000.

The companies mobilised civil society leaders to increase membership. Rita Gurung, vice-president of the Federation of Hong Kong Nepali Association, said she became a member of one of the companies under pressure from one such individual. “There are many Nepalis who took the membership after being promised up to HK$50,000 monthly income by friends and influential people,” she said.

Dinesh Subba, a musician, said involvement in the business has resulted in disputes between friends and family members. “The companies gave good returns to some, while defrauding many,” he said. “Serious differences have been created between the referrers and referees, in many cases within the same family.”

Most of the Nepali members of these companies are said to have invested more than HK$ 100,000 each, with the highest individual investment being HK$ 2.8 million.

However, the companies have not stopped making false promises. KaChing has been telling its members to convert their investment into equity shares.

Hong Kong Police’s Commercial Crime Bureau has started an investigation into these companies and the police have asked the deceived people to furnish details of their investment.

According to the schemes launched by these companies, an individual would have to pay $1,288-1,388 to open an account, which would ensure gifts such as expensive smartphones, laptops, watches, home and vehicles at the half the market price.

Then, the members would get dividends up to $20 per day. The companies initially offered the investors the promised returns, increasing memberships notably, but they started defaulting payments after a few months. The transactions took place on the websites of the companies.

Not only Nepalis, but also thousands of Chinese have taken memberships of these companies.  Even Nepalis residing in the UK

and Australia have invested in the schemes.