A Hong Kong couple who run an organisation that marketed a "magic" lamp via pyramid selling have been arrested in Shaoguan , Guangdong, during a broad crackdown on illegal sales activities, mainland police say.
The pair headed the organisation under the auspices of Digital Crown Holdings (HK) Limited, the police said yesterday.
DCHL's Hong Kong office said the couple, whom the police referred to as Pak "X" Man and Cheng "X" Fai, were only individual distributors of the company.
"The arrests … have nothing to do with us, and the incident won't affect our business in Hong Kong," said DCHL's customer service manager, who declined to give his full name.
DCHL uses pyramid selling to promote its products, including the lamp, which allegedly improves health using aromatherapy. The multilevel marketing strategy encouraged distributors to recruit salespeople aggressively and collected membership fees from them, the police said. The system is illegal on the mainland but allowed in Hong Kong because of a legal loophole.
All eight DCHL offices and stores in Wan Chai and Causeway Bay were open yesterday.