Multi-level sales organization Shining Minoca Co., Ltd. failed to report to the Fair Trade Commission for recordation when changing the content of its registered information, in violation of the Fair Trade Law
Case:
Multi-level sales organization Shining Minoca Co., Ltd. failed to report to the Fair Trade Commission for recordation when changing the content of its registered information, in violation of the Fair Trade Law
Key Words:
multi-level sales, to file for recordation
Reference:
Fair Trade Commission Decision of June 28, 2001 (the 503rd Commissioners' Meeting); Disposition (90) Kung Ch'u Tzu No. 080
Industry:
Direct Sales (4812)
Relevant Law:
Article 7(1) of the Supervisory Regulations Governing Multi-Level Sales
Summary:
1. On 17 November 2001, the Fair Trade Commission (FTC) dispatched an officer to the offices of Shining Minoca Co., Ltd. (Shining Minoca) for inspection pursuant to the provisions of Article 23 of the Supervisory Regulations Governing Multi-Level Sales. The officer discovered that the amount of company's capital as shown on its company license had been increased but the company had not filed the changes for recordation. The officer also found that, based on the information the company had previously filed for recordation and on the business description provided by the company on 30 November 2000, the prices and integral value on some of the company's products had been changed without filing to the FTC for recordation. The officer then took the initiative to conduct an ex officio investigation. 2. The investigation found that Shining Minoca raised the amount of company's capital from NT$18 million to NT$25.2 million on 25 July 2000, resulting some changes on its company license and business license. The company, however, failed to report the changes to the competent authority for recordation within 15 days of the changes as required by regulations. The investigation also showed that Shining Minoca in November 2000 changed the price and integral value for the following products: SJ-grade 10W-40 all synthetic motor oil, SJ-grade 15W-50 all synthetic motor oil and multi-purpose concentrated diesel fuel additive; and changed the integral value on its "high-performance carbon build-up and moisture eliminator." Beginning 1 January 2001, the company changed the prices and integral values for its SJ-grade 4W-40 all synthetic motor oil and SJ-grade 10W-50 all synthetic motor oil. On 1 December 2000 the company also began selling a line of 16 products in its "maintenance series." Through negligence or lack of a clear understanding of the law, however, the company failed to report the changes for recordation. 3. The results of the investigation clearly indicate that Shining Minoca failed to report the above-mentioned changes to this Commission for recordation as required by the provisions of Article 7(1) of the Supervisory Regulations Governing Multi-Level Sales as prescribed in Article 23-4 of the Fair Trade Law. After considering factors such as the number of personnel in the organization, the magnitude of the economic benefit, its attitude in cooperating with the investigation, and the degree to which the acts in question harmed the trading order, the FTC fined Shining Minoca NT$100,000 in accordance with the provisions of Articles 41 and 42(3) of the Fair Trade Law. Appendix: Shining Minoca Co., Ltd.'s Uniform Invoice Number: 96855644 Summarized by Chi, Hsuen-Li; Supervised by Lin, Ching-Tarng