|Members of Lien Ket Viet company in one of its events. — Photo dantri.com.vn
HA NOI (VNS) — The Ministry of Industry and Trade (MoIT) has rejected claims that it acted late in responding to allegations of fraud involving marketing firm Lien Ket Viet, which allegedly swindled 45,000 people.
Deputy Minister Do Thang Hai yesterday told reporters that the multi-level Viet Nam commercial production joint stock company had received its operating licence for the first time on October 2, 2014, and had renewed its licence on December 22 of the same year.
Only seven months later, on July 7, 2015, the Vietnam Competition Authority under the MoIT decided to fine the company VND570 million (US$25,330) for several violations, including providing misleading information to customers regarding the company's product performance.
"The MoIT launched an inspection only seven months after the company began operations. You can't say that the MoIT acted late on this issue," Hai said.
In an effort to justify the ministry's failure to warn the public of the risks involved in joining the multi-level trading system even though it was aware of the company's violations, Hai simply said the authorities had based this decision on the relatively low severity of the violations.
The Deputy Minister hinted that Lien Ket Viet's actions, which attracted fines of half a billion dong last year, were not significant enough to be publicised.
On February 22, seven of the firm's top leaders were arrested for allegedly swindling over 45,000 people and misappropriating funds totalling VND1.9 trillion ($85 million) since 2014.
These figures, however, may change going forward as the investigation is still underway, Hai said.
The company had falsely advertised itself as being part of the Ministry of National Defence to win the confidence of customers.
The company's main products of dietary supplements and healthcare devices, mostly spurious items, were sold at higher prices than the authentic products.
Police also found the company had forged many documents, including certificates for outstanding service. — VNS