Global Ad-Mart reaps millions
Cairo - Amr Wali
Economists have cautioned that network or multi-level marketing companies are gaining ground in Egypt.
Ahmed Ghoneim, director of the Economic Research Centre at al-Sadat Academy in Cairo, explained: “Network marketing companies promote fraudulent funds, which ultimately bring collapse to the detriment of thousands of victims.”
The companies reap profits not only for sales they generate, but also for sales generated by multiple tiers of salespeople recruited to promote company products.
Nasr City Prosecution recently imprisoned three individuals affiliated with Global Ad-Mart, a network marketing company directed by Ayman Shoker Allah. Hit singer Hatem Fahmy was among the offenders.
Security sources asserted that "network marketing companies take advantage of young people who want to get rich quickly, with minimal effort," adding that multi-level marketing had contributed to economic collapse in several countries worldwide.
Global Ad-Mart raked in over EGP£60m. Police officers, doctors, engineers, and university professors had also invested in the pyramid selling scheme.
Salma Sabahi, the daughter of Egyptian Popular Current leader Hamdeen Sabahi, claimed that Fahmy and Ayman accepted $9,000 of her money for an online investment scheme they promised would deliver monthly returns. Sabahi said she never received any dividends.
A resident of Giza governate in central Egypt recently lodged an official complaint against Salma Sabahi, alleging that she invested $88,000 thousand dollars of his money in online businesses.
Economist Osama Ghaith attributes the proliferation of network marketing companies to deteriorating economic conditions and standards of living in Egypt.
He told Arabstoday that "the perpetuation of this type of marketing will have severe repercussions for Egyptian economy, which is already in crisis,” adding that “the nation must assume full responsibility for tackling this matter to prevent economic collapse."