GoldQuest parent, Questnet International in rugby sponsorship deal

By Duruthu Edirimuni

The controversial multi level marketing (MLM) firm, GoldQuest's parent company, Questnet International Ltd (QI) has signed up with Sri Lanka Rugby Football Union (SLRFU) for a Rs.50 million sponsorship, fuelling speculation that the company is determined to establish itself in the local social and economic fabric.

Goldquest has been under investigation by the Central Bank for over two years. QI is pumping in money for the forthcoming Rugby Seven’s in Hong Kong. QI is also sponsoring Sri Lanka’s national team for the entire 2007.

“They will be sponsoring the team to the Rugby Sevens in Hong Kong. Since QI is based there, the company wanted to sponsor the rugby team because they feel it is good publicity for them,” Asanga Seneviratne, Vice President, SLRFU told The Sunday Times FT. Seneviratne, who is also the stockbroker for GoldQuest, vehemently denied the charges against the company, saying that both QI and GoldQuest ‘are one hundred percent genuine’. “They are not promoting this game due to vested interests and they do not have a hidden agenda,” he said.

He said that this sponsorship is the largest that the SLRFU has received so far. “I trade for them and I have done a due diligence where I found them to be 100 percent indisputable,” he reiterated. Seneviratne said the only allegation against GoldQuest is that its customers paid for the goods in credit cards. “But even then the Central Bank could not prosecute them because at the time there was no such ban,” he said.

GoldQuest came under fire by the regulator when the company encouraged its customers to pay through credit cards and violated exchange laws, which treated these payments as capital transactions. Some arrests were also made and there were many who were fined large amounts as well. However, at the time, there were no laws preventing GoldQuest and similar firms dealing in pyramid schemes or MLM.

The Central Bank amended the Banking Act in February last year, prohibiting such schemes, but so far has not put the laws into practice. “This is a US$ 500 million company, which in Sri Lanka is being treated really maliciously and you are on a witch hunt while being biased to them,” Seneviratne berated.

Central Bank officials said that GoldQuest operations will continue to be scrutinised by them, but any manoeuvre that they take outside the specified regulations such as embarking on an advertising campaign cannot be questioned.