The southern Ho Chi Minh City trade inspection task’s initial report found that Sinh Loi Company conducted illegal practices concerning taxation, invoices, promotions, labeling, network marketing and trade fraud.

A final conclusion and corresponding punishments are to be announced in the next week.

Because of the serious nature of the charges, the company stands to lose its multi-level marketing business certificate, said Tran Vinh Nhung, deputy director of the trade department.

The company sold televisions, VCD and DVD players under the Taiwanese PEEHUANG trademark, but the units were actually built in Vietnam with parts from China.

Inventory on a line of 22 cosmetic items was labeled “made in Taiwan” but had no corresponding documentation to prove product ordering or origins, the inspection team said.

Established in 2000 with total registered capital of VND2 billion (US$1.3 million), the company has more than 100 staff and over 26,000 individuals associates.

In a typical multi-level marketing arrangement, individuals work under a parent company as an independent contractor and are compensated based on product or service sales volume.

Reported by Nguyen Hang – Translated by Ha Viet