one can argue endlessly about the scheme. I was (un)fortunately invited for one of their "presentations" and they went on the normal, silky-smooth presentation about how they are different from other "schemes", they are running a proper business, they are blah blah...but obviously when pressed further they cannot answer a few questions. Some points any one of you should check out
Taking it at face value, you are buying in as "shareholders" where they have unlimited ability to issue shares and upon each sale of the "shares", someone up in the chain earns from it, all the way to the very top. From my understanding, they are looking to raise RM$10million initially for their 60-100 store expansion in Malaysia. Supposedly, each store would cost about RM$200-300k to open. From the other postings on this topic, you receive 5% per MONTH, making it about 60% per annum returns.
1. Their referral scheme- from what i gather and did some back-of-the-envelope calculations, they are paying out about 50% to their "uplines", etc in referral fees. And if i'm not mistaken, if all the shares are sold, the guy at the very top would rake home about RM$1,000,000. Proper business eh?
2. So, let's assume that is right, after paying out the referral fees, you are left with half or less than that to run the stores, you can't even open half the number of stores now, how on earth are you going to sustain the 60% p.a. returns to the "shareholders"??? Obviously something is amiss
3. Shareholding, the legal issues aside on the fact taht raising money from more than 50 people amounts to a public offering and they need a few years of viable business and they have to register with the Bursa, there is absolutely no way to tell how many shares they've sold and how you can restrict the future sale of shares.
Check it out, they have a non-viable business plan, an overly high return, non-restrictive, fully dilutive share issuance. They are in the business of selling their SHARES, NOT the sale of FOOD> this is a PONZI, through and through.
This is a little short on details on the referral scheme as I listened to this a good 6 months ago. I feel compelled to come forward as there are SO many of these schemes floating about Malaysia. Come on people! There are NO such thing as easy money!!! Enough is enough...can everyone wake up to your senses and not let these conmen have their day?
Island Red Cafe, MLM Business 5% fixed return
Feb 17 2009, 01:55 PM
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