Financial Times

Cabinet approves anti-pyramid law
Cabinet has approved the draft anti-pyramid legislation designed to combat quick money making schemes which have duped hundreds of people, Dr. P. B. Jayasundera, Secretary to the Treasury said. It will now be presented in parliament soon.

The government decided to fast-track the legislation to put a stop to the easy money making schemes which were spreading rapidly in the country.

Controller of Exchange H. A. G. Hettiarachchi said that he has appointed a special task force to carry out further investigations on the replies to the show cause letters he had sent to the credit card holders who had violated exchange control regulations in the GoldQuest referral marketing scheme.

Meanwhile readers have drawn attention to a discrepancy in a GoldQuest advertisement published in some newspapers last week in which it reproduced a letter from the Royal Monetary Authority of Bhutan issued in February 2003 granting the company exclusive rights to mint and sell gold numismatic legal tender coins.

GoldQuest claimed in the ad that the letter was "evidence that GoldQuest International has a legitimate business relationship with the Royal Monetary Authority of Bhutan."

However, the letter from the Royal Monetary Authority, Bhutan's Central Bank, itself said the rights had been granted only until July 25, 2003. GoldQuest officials were not available for comment Bhutan's Central Bank banned GoldQuest earlier this year after labelling it a pyramid scheme where gains are made by some from the wealth lost by others, The Sunday Times FT reported on July 18. The Royal Monetary Authority of Bhutan said in a statement that it had become aware of a financial scheme using commemorative coins from GoldQuest International as the primary product being marketed in Bhutan.

"While studying this scheme, RMA found that this is a pyramid scheme," the statement said. "Such schemes do not generate any productivity but gains are made by someone from the wealth lost by another. The scheme depends on bringing in an exponentially growing number of new members and is likely to collapse after a certain stage, resulting in heavy losses to a vast majority of its members."

No response from GoldQuest
The Sunday Times FT request to interview the GoldQuest management went unheard on two occasions. The first request was made via e- mail on July 13 through the company's local PR agency, Rowland PR, and the second was on July 28.

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