The operations of a controversial Hong Kong-based multilevel-marketing firm in Zhongshan, Guangdong, appear to be continuing despite police claims that they had cracked down on the branch, former members say.
The company, Digital Crown Holdings (DCHL), merely changed the name of its operation there, they allege.
"The Zhongshan police only arrested three DCHL team leaders," Li Huidong, a former product distributor based in that city, told the Post. "Many distributors have transferred to a new company named Sibellac Holdings to continue their business.
"The operations and system of Sibellac are exactly the same as DCHL's. Distributors still take new members to Hong Kong for brainwashing classes and contract signing, but now they hide in flats and offices in Causeway Bay and Mong Kok or even in Tsuen Wan and Fo Tan."
Li, a native of Ningxiang county, Hunan , said DCHL was the target of a series of crackdowns across the mainland, including in his hometown. "Banners declaring 'DCHL is an illegal pyramid-scheme firm' are hung everywhere in Zhongshan. That is why their distributors use another name to carry on the work."
At DCHL's centre in Causeway Bay, the company is still selling products and conducting training classes. Its operations are legal under Hong Kong law.
Distributors are divided into the levels of baron, count, marquis, duke, archduke and majesty duke, with the top rank allegedly able to receive up to 42 per cent of profits, a DCHL contract shows.
Sibellac also divides its distributors into levels: individual distributors, glass, crystal, sapphire, ruby and emerald, according to its contract, a copy of which was provided to the Post.
DCHL general manager Lau Chun-wei declined to define the relationship between his company and Sibellac, saying he was "not clear about any information of the new company".
On Wednesday, Xinhua reported Zhongshan police had charged three key DCHL members involved in running a pyramid scheme in the city. DCHL distributors collected nearly 10 million yuan (HK$12.6 million) last year by recruiting new members in Zhongshan, it said.