The Central Bank of Sri Lanka (CBSL) has declared 27 companies, applications and organisations to be prohibited schemes under the Banking Act, according to a notice to the public issued on Wednesday.

The Central Bank said it carried out an investigation under Section 83(C) of the Banking Act, No. 30 of 1988, as amended. It determined that Max App Media Ltd., together with its affiliated companies Max LK (Pvt) Ltd. and Max Media Lanka (Pvt) Ltd., had engaged in, conducted and promoted a prohibited scheme.

The notice, headed “Notice to General Public on Prohibited Pyramid Schemes”, said a number of other companies and applications had been ascertained and determined to be prohibited schemes under the same section of the Act.

Besides the Max group, the entities named by the Central Bank are:

  • Tiens Lanka Health Care (Pvt) Ltd
  • Best Life International (Pvt) Ltd
  • Mark-Wo International (Pvt) Ltd
  • VML International (Pvt) Ltd
  • Global Lifestyle Lanka (Pvt) Ltd
  • Fast3Cycle International (Pvt) Ltd
  • Sport Chain App and Sport Chain ZS Society Sri Lanka
  • OnmaxDT
  • MTFE App, MTFE SL Group, MTFE Success Lanka and MTFE DSCC Group
  • Fastwin (Pvt) Ltd
  • Fruugo Online App and Fruugo Online (Pvt) Ltd
  • Ride to Three Freedom (Pvt) Ltd
  • QNet (Questnet)
  • Era Miracle (Pvt) Ltd and Genesis Business School
  • Ledger Block
  • Isimaga International (Pvt) Ltd
  • Beecoin App and Sunbird Foundation
  • Windex Trading
  • The Enrich Life (Pvt) Ltd
  • Smart Win Entrepreneur (Pvt) Ltd
  • Net Fore International (Pvt) Ltd (Netrrix)
  • Pro Care (Pvt) Ltd and Shade of Procare (Pvt) Ltd
  • SGO (sgomine.com)
  • I.C.A.N. Advertising (Pvt) Ltd and its affiliated websites
  • Infinity Rover (Pvt) Ltd
  • TM App

The Central Bank also named the websites icanonlineadvertising.com, bannercuts.com, bannercuts.lk, bannercusts.net and bannercuts.org as affiliated with I.C.A.N. Advertising (Pvt) Ltd.

Background

Section 83(C) of the Banking Act is the provision under which the Central Bank investigates and declares prohibited schemes, as the notice itself shows. The Central Bank has used the same section in earlier public notices naming companies and applications.

A pyramid scheme is generally one in which participants are paid mainly from money brought in by newer members rather than from a genuine business activity. Such arrangements depend on a steady flow of recruits, and they tend to run into difficulty when recruitment slows.

The entities on this list are of several kinds. They include registered private limited companies, mobile applications, foundations and societies, and websites, so a scheme may reach the public as an app or a web page as well as through a company office or a personal approach.

What it means

Anyone who has been invited to join, invest in or recruit others for any of the named schemes can read the full notice on the Central Bank’s website, www.cbsl.gov.lk, before putting in any more money or bringing in friends and relatives.

The same check applies to Sri Lankans living abroad who are asked by relatives or contacts at home to send money to, or sign up for, an app or company on the list. Offers that pay mainly for introducing new members, rather than for selling a real product or service, are the kind of arrangement the notice describes.