"We have 250,000 non-Nepali clients in overseas markets," says Bishnu Chhetri, its managing director. And it has collected US$ 200 to US$ 240 from each of them for long-term social security liability and short-term travel packages like airport arrival and tour plans. [break]
"A great majority of them hold social security plans," adds Chhetri. He also says the company has remitted all its overseas collections back home.
But ULI´s financial figure (of Rs 6 billion) that Chettri and other officials repeatedly refer to covers only the capital it mobilized from 400,000 Nepalis (the company charges at least Rs 15,000 for its service scheme). The figure clearly does not include the well over US$ 50 million it mobilized from foreign clients.
Company officials maintain a dead silence when asked about this.
Furthermore, ULI officials claim they will bear their overseas liabilities from Nepal. But the company is not authorized to undertake outward transfer of foreign currency.
"Our Foreign Exchange Act clearly restricts outward flow of foreign currency without approval. Shouldering long-term liability to clients beyond the border in foreign currency is unauthorized," says an NRB official, requesting not to be named.
Given that the company is operating in a ´grey area´, officials concerned added that the company was violating international norms and domestic law against money laundering. "We hope NRB and the Revenue Investigation Department will investigate the case from this perspective as well," said the official.
But irrespective of what the law states, company officials say they are on an expansion spree in the international market. "We have corporate offices in Hong Kong, Malaysia, Dubai and Qatar and contact offices in 17 countries," says Chhetri.
That is not all. He boasts that the company has businesses in 62 countries across the globe. On the day myrepublica.com interviewed him, he said he was flying off to Oman the next day to set up a corporate office in Muscat.
The company´s website lists Israel, Bahrain, Saudi Arabia, Malaysia, Hong Kong, Kuwait, UAE, Qatar, Iraq, Afghanistan, Macau and Japan as countries and territories where it has contact offices or representation.
ULI claims that local citizens in countries where it is present are eagerly buying its plan. But knowledgeable people say the company has mainly lured workers in those countries from third countries to buy its unauthorized social security scheme.
"It has mainly lured Bangladeshis, Filipinos, Indonesians, Pakistanis and Indians to buy its assurance plan," said the source. The company has lured mostly poor and naïve workers from other countries.
Apart from the assurance plan (also termed Ill Fated Demise Plan), the company is dealing in a scheme called Termination Plan in Hong Kong exclusively, and it says it has thousands of clients from among Filipino and Indonesian workers under this scheme.
"Under the scheme, we buy them air tickets to fly back home when laid off," says Chhetri.
He further states that the company recently launched its unauthorized assurance plan in India as well, promising insurance benefits and bank returns to Indian nationals at a price tag of US$ 240. Its website has details of the plan in Hindi.
It also claims to have sold a substantial number of tour packages for Pashupatinath and Muktinath to Indian clients. "We have set up an office in Lucknow and pay the Indian government tax worth Rs 624 IC to remit the money back home," said Chhetri.
MoF forms probe
The Ministry of Finance (MoF) has formed a probe team to investigate ULI.
The team is headed by a senior official of the Department of Revenue Investigation and includes officials from Nepal Rastra Bank (NRB) and the Insurance Board (IB) as members. "Basically, the team will investigate the legality and tax and other compliance by the company," said an MoF official.
Clients demand money back
ILAM: Clients of Assurance Unity Life International, also known as Unity Life International (ULI), have demanded that the company return money that they paid for its social security scheme, after they realized that the scheme had been sold to them without due legal process.
Clients in the district have started to flock its office at district headquarters. The company had sold them the scheme saying that it will open a hospital, a departmental store, a resort, and a tea industry, among other things, in the district.
"Unity members pursued me so much that I could not even walk the street. Ultimately I agreed to buy their scheme," said Chhabi Shrestha, a resident of Barbote-2, Ilam.
Bahadur Khamdak of Jamuna-3, on the other hand, bought the assurance plan for himself and his daughter for Rs 30,000, after agents promised he would get insurance cover, bank interest and health services at discount rates.
"His son had sent the money all the way from Qatar, and it was meant for buying a piece of land. Unfortunately, the old man fell into Unity´s trap," said his nephew Dhan Bahadur Khamdak.
The company has sold the scheme to 4,300 people in Ilam, Panchthar and Taplejung districts. While many were lured into the scheme citing handsome business returns and social security, others like Shrestha were harassed into become members.
However, people like Khamdak and Shrestha have now rushed to Unity´s office for refunds. Myrepublica.com had carried the news of illegal operations by the company and its dubious financial status last week.
They complained that the company has agreed to refund only 65 percent of the sum they paid for the scheme. "Its officials said the company deducts 35 percent of the sum as penalty for withdrawing the money before five years," said a dissatisfied client.
People demanding refunds mainly vented ire against one Tirtha Dhakal, who they said was the first member of Unity in Ilam and currently handles its business as president of Unity´s Ilam branch.
They informed myrepublica.com that Unity had promised to open a hospital at Barbote VDC adjoining district headquarters. But contrary to the promise of constructing a big hospital there, Unity just hired a doctor and opened what it called a ´hospital´ at district headquarters.
The company had further announced four years ago that it was opening a department store in the district, but its officials still only say that it will open soon.
milan@myrepublica.com
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