1.1. Multi-level marketing (“MLM”) or direct selling models, where goods are marketed/sold directly to the end user (and not through a fixed retail location), by a network of distributors at different levels of distribution is a well-established business model used by various companies.
1.2. However, there have also been various instances, of ‘ponzi’ or ‘pyramid schemes’, operating under the guise of MLM models, where income is generated through enrolment of more and more members, rather than sale of any tangible product, and which lure in the unsuspecting public through claims of quick and easy money. These schemes are regarded as a ‘Money Circulation Scheme’ and prohibited under the Prize Chits and Money Circulation Schemes (Banning) Act, 1978 (“Money Circulation Act”).