Part 01:
Introduction
1.1 Origin of the Report:
This report has been
prepared to make a study on the “unethical practice by Destiny 2000 Ltd”. As a
student of Business Ethics our course will not be fulfilled without preparing
this report. The report was prepared under the supervision of our course
teacher Prof.
Dr. A.K.M Salahuddin. We are
very much thankful to him for assigning me such types of project work.
1.2 Background
of the Study:
As a student of MBA we encouraged to find the
similarities between their learning & real world situation. So, this can
also be considered as the objective for the project in a broader sense and to
compare and analyze the practical experience by working to link the theoretical
knowledge with its application in a real life situation.
1.3
Objective
of the Report:
To know
the unethical activities done by Destiny 2000 Ltd. To find
out its solution. To know
lawful step taken by Government.
1.4 Methodology:
Generally in a report there are uses of two
types of data. These are as below:
But here we use only secondary data.
The “Secondary
Data” has been collected from different sources such as Websites.
Part 02:
Company
2.1 Company overview:
Destiny-2000 Ltd. is the largest Direct Selling
company, i.e. fastest growing and biggest Network Marketing Company in
Bangladesh.
It is also one of the Top
10 (ten) largest Direct Selling Company among the world. Ending June 2012,
about 4.5 million Independent Distributors have already enrolled in to the
system, and started working as an Independent sales representative of the
company, since its inception on December 14th, 2000.
Having its corporate
office situated at NTC (Nasir Trade Centre) Tower, near Banglamotor area in
Dhaka Bangladesh, the company expanded their 7 (seven) divisional offices along
with 119 branch offices across the country. For the Products distribution, the
company setup 15 Divisional Channel of Distribution (DCDs), and over 1000
"Regional Distribution Centres (RDCs)" along with few hundreds of
"Institutional Regional Distribution Centres (IRDCs)" aslo been setup
all across the country.
Traffic graph for Destiny-2000.com
Present Sister Concern of Destiny-2000
Ltd.
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2.2 Vision:
To stand as a pioneer Multi-level Marketing
Company in Bangladesh and contribute significantly to the national economy.
2.3 Mission:
Our Mission is to
enhance the quality of life by creating self employment scope for educated
but unemployed youth leading to promote million of small entrepreneurs. Their
mission was
To provide high quality services with the help
of latest information technology.
To serve fast and accurate customer service.
High stander Business ethics.
Fir commitment to the society.
Growth of national economy.
2.4 Financial performance:
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Part 03: Unethical
Activities
Here are some of the illegal activities
of Destiny 2000 Limited and its sisters concerns:
3.1.Tax dodged by Destiny:
Destiny
organization showed in their annual report that they pay tax regularly.
Investigations
into the tax dodging by 37 Destiny concerns and their top officials started in
April and are still on, officials say, adding that their initial inquiry showed
the group had evaded at least Tk 110 crore in taxes.
Upon
detection, the NBR asked Destiny to pay the money, and the company issued a
cheque of about half the amount but the money could not be realised due to the
BB freeze. Destiny evaded tax TK100cr not by one year span. It might
have indulged in to dodge the tax long since.
3.2
Money laundering and illegal banking:
Destiny
Multipurpose Cooperative Society Limited [DMCSL] proclaims to be "a
financial institution and registered on April 23, 2005 as a financial
institution to provide new financial assistances of total tk. 100.00 crore
every year from 2011 to the Distributors of Destiny-2000 Ltd. to expand direct
selling business and attain respectable earning capabilities."
It
was categorically mentioned by sources in the Ministry of Finance and
Bangladesh Bank that, no such license
to operate as financial institution or bank was ever issued in favor of Destiny
Multipurpose Cooperative Society Limited on April 23, 2005 or even till
November 21, 2011. It is easily understood that, Destiny Multipurpose
Cooperative Society Limited is illegally continuing to operate as a financial
institution, while the matter has never been investigated either by the
Ministry of Finance, Bangladesh Bank or the Anti Corruption Commission in
Bangladesh. It is learnt from number of sources that, Destiny 2000 Limited
maintains cadre of their own lobbyists within the Ministry of Finance and
Bangladesh Bank and a number of Assistant Secretaries and Deputy Secretaries in
the Ministry of Finance as well as some Deputy Governors and General Managers
at Bangladesh Bank are under monthly payroll of this MLM fraud racket.
3.3
MLM fraud racket:
While an investigation is underway, the
alleged fraudulent activities of the multilevel marketing (MLM) company Destiny
2000 Limited have stirred the whole nation recently. Multi‐level
or network marketing (MLM) is one of the most complicated of business models.
MLM based companies sell their products through a large network of self‐employed
distributors. The United States based multinational Amway is perhaps the best
known example.
MLM works in the following manner:
Destiny group appears to have merged the
logic of MLM, an investment company, and a pyramid scheme. Rather than sell a
product, the group sold stakes in different profit‐making
endeavors, such as a tree farm, an infrastructure project, and an upscale
residential building. Destiny clients were promised that if they invested a
certain amount
of money, they would be paid back double
their money within a certain period of time.
Selling products by Destiny:
Most
of their products are overpriced and not up to standard level of other regular
brandproducts in the market. Nowadays they are selling books and CDs of
Marketing training inoverpriced rate for marketing their own products which is a
clear sign of non-productivepyramid scheme. They also have tree, real-estate
and other business products which aredeclared as illegal products (those
products cannot be sold by MLM companies) by thegovernment recently.
More importantly, if they recruited other
people to raise additional investment funds for the company, then they would
earn additional commissions. The model was enormously “successful,” and it is
estimated that about 5 million distributors joined the company from all over
the country.
Multi
Level Marketing is a Great Opportunity for Solving Unemployment Problem In
Bangladesh.We Can Use Opportunity To Become Successful In Life.We Must Know
that ,How a People Become Successful In Life To Use MLM Plan.
Unfortunately, it appears that many of the supposed
profit making endeavors never actually existed, others were money losing
endeavors, and the remaining initiatives would certainly not profit enough to
pay investors back at the promised rates.
3.4
Cheating people with fake tree plantation project:
Destiny
Tree Plantation Limited is one of the most fraudulent enterprises of the
dubious MLM Company Destiny 2000 Limited. Former chief of Bangladesh Army Lt.
Gen. M. Harun-Ar Rashid is the chairman of this fraudulent Destiny Tree
Plantation Limited, which claims to be "engaged in the plantation of trees
on commercial basis all over the country. Till date the company has planted
over 94 Lac [9.4 million] trees on 6293 acres. The target is to raise the
plantation number to 6 crore [60 million] by 2012."
It
is learnt that Destiny Tree Plantation Limited offered alluring
"packages" to its members and the people, where the company claims to
possess 60,000 acres of land in Bangladesh. Meanwhile, Destiny Tree Plantation
Limited has already collected more than Tk. 65 thousand crore from the people
by selling "packages" of the Destiny Tree Plantation Limited, though
Destiny 2000 Limited or Destiny Tree Plantation Limited do not possess even a
fraction of the claimed land in the country. According to a number of sources
inside Destiny 2000 Limited and Destiny Tree Plantation Limited, the company has already sold more than 120
million "tree packages" to the people, by giving false and
fabricated information. In some cases, fake
pictures of tree plantation were taken from Chittagong Hill Tract and Sundarban
mangrove forest areas, to befool the prospective buyers of the "Tree
Package".
"Muhammed
Rafiqul Amin knows that the 'Tree Package' is a total fraud and he is
continuing this trap to collect millions and billions of Taka from the innocent
people. General Harun [the ex chief of army] will be ultimately made a
scapegoat in this huge financial scam, when the Destiny 2000 Limited and
Destiny Tree Plantation Limited will bust by end 2012", said a Destiny
source.
3.5
Illegal insurance company:
Destiny
Life Insurance Company Limited is shown as one of the sister concerns of
Destiny 2000 Limited at their website. It is learnt that, shares of this
company have already been sold amongst the members of Destiny 2000 Limited and
Muhammed Rafiqul Amin and his gangs have cashed at least TK. 300 crore from
selling of the shares of this life insurance company. On investigation it was
revealed that, Destiny Life Insurance Company Limited does not have any license
issued by the Bangladesh government for operating as an insurance company,
while this MLM Company is allowed to publicly publicize this illegal company.
3.6 Illegally
constructs hotel in Bangladesh:
Fraudulent
Multi Level Marketing [MLM] Company Destiny 2000 Limited has started
construction of a five-star hotel at Cox's Bazar sea beach area [within the
Sea-in Point] without obtaining any approval of the architectural design of
environment certificate. In addition to this, the MLM Company is constructing
another 9-storied building adjacent to this illegal hotel project. According to
information, Destiny 2000 Limited has placed a huge signboard of its "Best
Western Destiny Beach Hotel & Resorts", claiming it to be the
first-ever five star chain-beach hotels in Cox's Bazar area. In this signboard,
Destiny 2000 Limited has also provided description of facilities in this
project, which include Super Deluxe Suite, Deluxe Suite, Presidential Suite,
Honeymoon Suite, Spa, Bar, Restaurant, Banquet Hall, Business and fitness
center, Bar-B-Q and rooftop restaurant. On investigation it was revealed that
the MLM Company has not applied with the relevant authorities for permission of
starting bar inside the project. Former chief of Bangladesh Army, Lt. Gen
[Retired] Harron Ar Rashid is the coordinator of this illegal project, who is
exerting his influence in letting the company continue its illegal construction
on the very sensitive Sea-in-point of the largest sea beach in Bangladesh.
The
Tower will be constructed between 30-40 floors depending on the approval of
Rajuk (Capital Development Authority) and other Govt. Authorities. The
construction will be made on 106 Kathas of land (approx 1.75 acre) at 36/A,
Inner Circular Road, Kakrail, Dhaka-1000 (Presently where Bijoy Nagar Hotel
Complex is situated). The expected date of starting the construction is in the
month of July 2006
3.7
Fake Airline Company:
Best
Air is one of the many fake projects of Destiny 2000 racket. When Bollywood
cine star Shahrukh Khan visited Bangladesh to attend the hugely organized
cultural evening, Destiny's sister concern Boishakhi Television bought the
broadcast right of this event and while the event was continuing, advertisement
of BEST AIR was televised repeatedly, to give an impression to public that,
this was a genuine airline company. But in reality, Best Air is nothing but a
fake company only with an office at Dhaka's Badda area. It is learnt from
inside sources in Best Air that, Muhammed Rafiqul Amin has already sold 'share
package' of this fake airline company to the agents of the company as well as
citizen thus collecting at least TK. 1200 crore.
3.8
Boishakhi Television:
It
is learnt that, every month satellite
transponder rental amounting to US$ 35 thousand is being sent by Destiny 2000
Limited to continue the Boishakhi Television through illegal hawala channel.
Anti Corruption Commission and Bangladesh Bank are reluctant in taking any
action against Destiny 2000 Limited or Boishakhi Television for such illegal
transfer of foreign currency for reason unknown
Destiny
is also planning to sell shares of Boishakhi Television to its agents with the
target of collecting at least TK. 2000 crores. It is cautioned by the financial
experts that, people buying shares of this television channel may not ever get
any profit or dividend in near future.
Ethical
Solution of these unethical activities:
Solutions: 1
Evading tax is unethical. Every company and
person have to pay tax. to make this wrong doing right, correct ethical
decision would be to pay taxes fully according to the law of the country. It is
important to pay the taxes to run the company ethically.
Solution 2:
Hence it is
unethical. Money laundering and ethical banking must be stopped. Activities of
this company should be ethically correct. To do that administrator of this
company should have correct ethical thinking. They have to follow money
laundering law of this country. To avoid this kind of unethical work they have
to follow correct ethical frame work in the future.
Solution 3:
Many people think MLM system is good business
concept and also ethically sound. Through this system many quality product can
be sold. But destiny unethically sold low quality and less demanding product in
high rate. To run the business in correct ethical way they have to supply the
good quality product at reasonable price in the MLM system. So that the
customers can be satisfied and not feel cheated.
Solution 4:
As
it is a fake project and there is not enough trees for people, the project must
shutdown and return the money they took from the people. This will be ethically
correct decision to solve this problem. It is nearly impossible to run this
project in a ethical way because there is not enough barren land to plant tree
for about 120 million people or more.
Solution 5:
There
is no other solution but to return the money that they took from the people in
the name of Destiny Life Insurance Company’s share. It is the right ethical way
to solve this problem. If they want to issue share in future, they have to
follow security exchange commission’s rules and sell company’s share in the secondary share market.
By
following this ethical solutions this company have a chance to regain the faith
of people and its goodwill.
Action have been taken by the Government:
LAW ON MLM COMPANIES Muhith went on to say the government has
taken steps to formulate a law to bring MLM business under a legal framework. A
commerce ministry official, requesting anonymity, told bdnews24.com that they
have already finalised a draft of the law but could not it present before the
cabinet due to some objections by the public administration ministry. "The
draft proposes to form a directorate and appoint staff there. But the public
administration ministry is not giving its clearance to the manpower recruitment
clause. So, the draft hasn't been presented to the cabinet," he said. The
central bank asked the company to stop illegal banking and pay back its
depositors . But as it failed to repay its clients within the stipulated time,
the government shut its operations. Destiny 2000 Limited and Best Western
Destiny Beach Hotel & Resorts' constructing multi-storied buildings within
sea beach zones in violation of the order of the Bangladesh Supreme Court will
be drawn into attention of the court soon, as such activities are clear
contempt of court orders. A Dhaka court on Tuesday finally asked Anti-Corruption
Commission (ACC) to freeze 252 bank accounts of Destiny Group and Destiny-2000
Ltd.
Part 4: Conclusion
Only time shall tell whether the
'mistakes" made in the Destiny case were willful or otherwise. As for future,
we can only hope that proper rules and regulations are developed as promised,
and more importantly, followed. Furthermore, the whole society should work in
unison to create public awareness and cautiousness on the issue. Otherwise the
consequences will be enormous and millions of investors will continue to be
cheated out of billions of Taka every year.
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