Scores of people who eke out a living selling the wares of licensed multi-level marketing (MLM) companies and their families have been rendered jobless after being bracketed with money chain groups and booked under various offences. Sources said this was mainly owing to the government delay in framing a legislation to define their nature.

This is in spite of the fact that the State government has issued clear guidelines to regulate the sale of goods and services by such companies outside the retail establishments and protect the interests of the clientele. The police action against the distributors and employers was mainly due to the lack of a clear dividing line between the nature and functions direct selling companies and money chain groups. The direct selling sector is fast growing and there was a spurt in the number of sellers. This was mainly due to its employment generation potential and reasonable returns the educated unemployed earned from it.

Serious charges

Those in the industry say educated youth, including MBA holders who had been earning a decent income by working in licensed companies, and those covered under the Kerala Shops and Commercial Establishment Workers Welfare Fund, were being booked on serious charges. The Union Ministry of Consumer Affairs, Food and Public Distribution had clarified in 2003 that such agencies do not come under the provisions of the Prize Chits and Money Circulation (Banning) Act, 1978.

AITUC leader Kanam Rajendran told The Hindu on Monday that 977 cases had been registered against various persons who had been working as distributors and vendors of the products of such companies.

This was mainly on account of the slender difference between direct marketing and money chain companies. Instead of initiating action against the manufacturers of the products, vendors and employees were being targeted by the police. This was against the consensus reached at a meeting with trade union leaders held in the presence of Chief Minister Oommen Chandy, Home Minister Thiruvanchoor Radhakrishnan and other senior police officers here on October 9. If action was taken against such companies, punitive action can be initiated against KSFE and new generation insurance companies too.

Though it was agreed to frame a legislation to define direct marketing and protect the employees and distributors, things were moving at a snail’s pace. In this context, the government should promulgate an ordinance and come to the rescue of those working in the sector, Mr. Rajendran said.