Though, the ministry had enforced the directives on January 31 to regulate goods related networking business in Nepal, consumer rights groups have been protesting against the directives as the section 55 of Consumer Right Protection Regulation was silent on the issue.
"That was a malpractice of MoCS which has to be revoked," said Ram Chandra Simkhada, secretary of Consumer Rights Protection Forum (CRPF) that was against the directive since the ministry enforced it.
Government’s negligence in regulating the business has fueled the rapid growth of the business. More than two dozen network marketing companies operating in Nepal are doing business over Rs 28 billion. Money collected by networking companies from poor and low income people was always in risk as the business was unprotected by laws. Over half-dozen network marketing companies had fled in last two decade with Rs 4.6 billions due to weak law. Consumer right activist, Jyoti Baniya, blamed the authorities – the ministry, Nepal Rastra Bank (NRB), Insurance Board (IB) and others related agencies for the rapid growth of business.
"Why did not the authorities take action against networking companies earlier," he questioned. According to Baniya, there are hidden causes including monitory benefit in issuing network marketing directive. "NMD was also the product of mal-intention,” he said.
Meanwhile, the MoCS has formed a five member investigation team under the coordination of joint secretary of the Ministry including representatives from Ministry of Industry, Finance Ministry, Home Ministry and Ministry of Law and Justice. The ministry has banned networking business throughout the country until further notice.
The ministry has strongly warned networking companies to stop their activities.
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