Upstream journalist Wang Jingjing
A few days ago, a person familiar with the matter revealed to the media that Shanghai Dalway Trading Co., Ltd. (hereinafter referred to as "Dalway Trading Co., Ltd."), the operating entity of the "TST Court Secret" of "Queen of Micro-business" Zhang Ting, has been determined by the market supervision department to constitute the illegal act of organizing and planning pyramid schemes, and has been confiscated 19.2799 million yuan of illegal gains, fined 1.7 million yuan, and fined a total of 21 million yuan.
The upstream reporter obtained from the insider a copy of the administrative penalty decision (hereinafter referred to as the "Penalty Decision Letter") imposed on The Dalway Company by the Market Supervision and Administration Bureau of Baokang County, Xiangyang City, Hubei Province. According to the penalty decision, from January 1, 2018 to July 2021, the relevant companies generated a total revenue of 9.171 billion yuan in the main business involving pyramid schemes. Due to the huge amount, this disclosure by the media has aroused a lot of attention.
In fact, as early as four months ago, on December 28 last year, upstream news reported that Lin Ruiyang and Zhang Ting's company Dalwei was investigated for suspected pyramid schemes, freezing 600 million yuan of funds. In the early morning of the next day, the "TST Court Secret" also responded through the official Weibo that the company is a legally operated company and everything is normal, but after that, the Weibo accounts of Lin Ruiyang and Zhang Ting were banned.
Zhang Ting's company, Darway, was found to constitute an organization planning pyramid scheme.
Image source/penalty decision provided by a person familiar with the matter
1. The "Red Card Member" system is suspected of pyramid schemes
The penalty decision issued by the Baokang County Market Supervision and Administration Bureau obtained by the upstream news reporter from the insider is aimed at the TST Court's secret operating entity, Dalway Company. According to the penalty judgment, as early as May 7, 2021, the market supervision department received an anonymous report that someone had engaged in pyramid schemes through the "TST Court Secret" mobile APP by pulling people into members, and the case was filed on May 25 of the same year.
According to the penalty judgment, from June 2013 to December 2017, Dalway signed cooperation agreements with four companies in Shanghai to sell TST brand cosmetics and daily necessities through micro-business agents. It is purchased directly from Dalway by micro-merchant agents, and then sold by itself. In this process, Darway was responsible for providing advertising services and training, and the Baokang County Municipal Supervision Bureau determined that the business model at this stage was in line with business practices.
In October 2017, Darway developed the "TST Court Secret" APP through its subsidiary, and then operated online in the name of the subsidiary, publicizing it through WeChat, blogs, websites and other platforms, and developing member sales products.
The problem lies in the development of membership. According to the penalty decision, when developing members, Dalway Company formulated a bonus system, which was divided into "Red Card Members" and "Blue Card Members" after several adjustments, of which "Blue Card Members" enjoyed purchase discounts, and "Red Card Members" not only enjoyed purchase discounts, but also formed teams to enjoy sales discount bonuses, batch zero difference bonuses, and self-media education promotion bonuses according to team performance.
The upstream news reporter learned from the "Li Xu Anti-MLM Team of the Civil Anti-MLM Association" that the users of the "Court Secret APP" are divided into members and VIP customers, of which members include blue card members and red card members, and for red card members who meet certain conditions and establish a company, they are also known as founder members.
"Ting Secret" private label products are mainly promoted and sold by registered members of the "Ting Secret APP", and there are also sales channels for consumers such as Tmall. Its red and blue card members buy or sell products in their own use and sharing, using the model of first selling and then purchasing, according to the different levels of the agent (judging by the performance of each natural month), giving sales discounts, discount difference bonuses, promotion service fees, of which the "red card" agent is divided into 7 levels, each level takes the same price, but different levels of rebates are different, so the higher the team performance, the more rebates.
"As your performance improves, your commission will be higher." Zhao Hua, who used to be a secret agent in the court, told the upstream news reporter that her online line told her that there was no threshold for entering the industry, and after entering the group, she could release the circle of friends according to the requirements of the group, but when she came to inquire about it, Zhao Hua realized that to open a card for her own downline, she had to buy 2500 yuan of products first.
This time, the Baokang County Market Supervision and Administration Bureau determined that the "Blue Card Members" belong to general consumers, and the bonus system for their members is in line with commercial practices and has no illegal acts. However, the "red card membership" system requires the development personnel to develop other personnel to join, form a relationship between the upper and lower lines, and use the sales performance of the lower line as the basis, and the act of calculating and paying the online remuneration is a pyramid scheme. As the initiator, organizer, planner and manager of the pyramid scheme, The Company constitutes the organization and planning of the illegal act of the pyramid scheme.
The decision discloses that From January 1, 2018 to July 2021, Dalway has developed more than 7.07 million members, including more than 659,000 red card members. During this period, the main business income of The Dalway Red Card reached 9.17 billion yuan, and the profit of 19.2799 million yuan was identified as illegal income. In the end, Darway was required to immediately stop the pyramid scheme, and confiscated 19.2799 million yuan of illegal gains, fined 1.7 million yuan, and was fined a total of 20.9799 million yuan.
2. The Shijiazhuang market supervision department is also investigating
In response to the situation that the TST court secret has been identified as a pyramid scheme, on the afternoon of April 11, the upstream news reporter contacted the Xiangyang Baokang County Market Supervision Department, and the staff said that there would be a staff handling the case to reply to the phone, but as of press time, the reporter had not received a call.
As early as 4 months ago, "Court Secret" was suspected of pyramid schemes and caused a round of attention. In December 2021, the anti-MLM team of the private anti-MLM association Li Xu issued a letter to the Shijiazhuang Yuhua District Market Supervision and Administration Bureau on requesting the Shijiazhuang Yuhua District Market Supervision and Administration Bureau to verify whether TST is suspected of pyramid schemes and whether to file a case to investigate and verify the letter.
On December 24, 2021, Li Xu's anti-transmission anti-fraud team received a reply to the verification letter, and the Yuhua District Market Supervision and Administration Bureau replied: Because Shanghai Dalwei used financial institutions to transfer or conceal funds involved in pyramid schemes, the bureau has applied to the people's court to take preservation measures in accordance with the law, and the case is currently under further investigation. Recently, Upstream News learned from informed sources that the staff of the bureau said that the above cases are still under further investigation.
"Court secret" e-commerce platform customer service said that normal business image source / e-commerce platform screenshot
The Court Secret APP is currently operating normally
On April 1, a poster with the theme "April 1st, Let's Come Back to the Court Secret" appeared on the social platforms of some "Court Secret" agents. The upstream news reporter noted that on the poster it was written that "at present, the secret structure of the court is legalized, and the family can rest assured that there is no need to jump the page to buy the secret APP in the court, and we will continue to build a legal and compliant court secret APP." At present, the Ting Secret APP is in normal operation, in April, the platform also set up a lottery, and several Taobao stores of "Ting Secret" are also in normal operation. However, on the afternoon of April 11, the reporter called the Company's phone and remained unanswered.
The upstream reporter noted that under the star effect of Zhang Ting and Lin Ruiyang, a number of stars have participated in their company's publicity activities in recent years, of which Xiao Taohong is one of the shareholders of their company, which occupies 1.93% of the shares.
TST agents publish posters with the legalization of the "court secret" structure.
Image source/person familiar with the matter
The "Court Secret" APP is currently operating normally.
Image source/ screenshot of the opening screen of the "Court Secret" APP
Upstream news reporter inquired and learned that Darway Company was established in June 2013, mainly engaged in the import and export of goods and technology, cosmetics, knitted textiles, clothing, shoes and hats, office supplies, daily necessities, arts and crafts, household appliances, bedding, furniture, maternal and infant products, gold, jewelry, medical equipment, food sales, etc. In the introduction of the industrial and commercial information platform, the company said that The daily chemical products brand of Darway Company was founded in 1996 by Zhang Ting's husband Lin Ruiyang, and its predecessor was Lafee, a well-known brand in Taiwan.
In addition, on February 14 this year, Mr. and Mrs. Zhang Ting set up a company called "Shanghai Shengsheng II Technology Co., Ltd.", with a registered capital of 300.02 million people, the legal representative is Qi Dongfei, and the chairman is Lin Jirong (Lin Ruiyang), and the business scope includes engaging in information technology and computer technology.
(Upstream News)