HÀ NỘI — The Hà Nội investigative police arrested and commenced criminal proceedings against four heads of the Thăng Long multilevel marketing company on Wednesday for alleged fraudulent appropriation of assets.

Company director Phạm Ngọc Tuân, deputy directors Lê Văn Quang and Vũ Đình Hùng, and head of accounting Hoàng Hải Yến were accused of appropriating a total of VNĐ700 billion (US$30.8 million) from clients.

Yến has been given bail.

Headquartered in the Trung Hòa-Nhân Chính new urban area in the capital city’s Cầu Giấy District, the The Thăng Long Franchise Limited Liability Company obtained a multi-level marketing licence on December 24, 2014. Since then, it opened 21 agencies nationwide and recruited tens of thousands of people to join its business network.

Operating under a pyramid scheme, the company launched different promotion programmes and promised clients they would recover their money within a year, according to the police. However, the amount of commission clients received was much lower than what the company had promised, the police said.

On September 5 last year, the Ministry of Finance decided to stop all the company’s sales activities nationwide and requested it to return money to its clients in accordance with regulations on multi-level marketing.

On August 2 last year, the company was fined VNĐ450 million ($19,800) for a series of violations related to multi-level marketing regulations.

They included failing to report changes in their dossier of application for a multi-level marking licence, signing more than one contract with one client, recruiting clients unqualified for multi-level marketing and not registering its conference, seminar and training workshop venues with the city’s Department of Industry and Trade.

Further, the company also provided false information about its nutrition products and did not allow clients to return the products after purchase. — VNS