PYRAMID SELLING PROHIBITION
PYRAMID SELLING PROHIBITION
(CHAPTER 355)
Whole document:
To prohibit the promotion of pyramid selling schemes and to provide for
connected matters.
[1 September 1980.]
1. Short title.
This Ordinance may be cited as the Pyramid Selling Prohibition Ordinance.
2. Interpretation.
In this Ordinance, unless the context otherwise requires-
"goods" includes all chattels personal and things in action;
"promote" means establish, advertise, manage or assist in the management
of a pyramid selling scheme;
"pyramid selling scheme" means a scheme whereby-
(a) a participant in the scheme is granted a licence or right to introduce
another participant into the scheme who is also granted such licence or
right and who may further extend the chain of persons who are granted such
licence or right, notwithstanding that there may be a limitation to the
number of participants or that there may be any further conditions
affecting eligibility for such licence or right; and
(b) a participant receives a reward on, or at any time after, the
introduction into the scheme by him of another participant which reward is
based, whether wholly or in part, otherwise than on the fair market value
of goods or services actually sold by him or by or through that other
participant;
"reward" includes, refund, commission, discount or allowance but does not
include payment for sales demonstration equipment and materials supplied
at not more than their fair market value and not resold.
3. Offence of promoting a pyramid selling scheme.
Any person who knowingly promotes a pyramid selling scheme commits an
offence and is liable on conviction upon indictment to a fine of $ 100,000
and to imprisonment for 3 years.
4. Liability of directors, partners etc.
(1) Where an offence under this Ordinance has been committed by a body
corporate or member of a body unincorporate, any person who at the time of
the offence-
(a) in the case of a body corporate, was a director, secretary, principal
officer or manager of that body corporate; or
(b) in the case of a member of a body unincorporate, was a partner or
office holder in or a member or manager of that body unincorporate,
or who, in either case, was acting or purporting to act in any such
capacity commits a like offence.
(2) Where any person referred to in subsection (1) is charged with an
offence under this Ordinance it shall be a defence for him to prove that
the offence was committed without his consent or connivance and that he
exercised such diligence to prevent the commission of the offence as he
ought to have exercised having regard to the nature of his functions and
to all other circumstances.
5. Power to award compensation.
(1) Notwithstanding any provision in any other Ordinance, where a person
is convicted of an offence under this Ordinance the court may, in addition
to passing such sentence as may otherwise be passed by law, order the
person so convicted to pay to any person who has suffered financial loss
resulting from that offence, such amount as compensation as it thinks
reasonable.
(2) An amount ordered as compensation under subsection (1) shall be
recoverable as a civil debt by the person in whose favour the order is
made.
6. Saving of rights and claims.
Nothing in this Ordinance shall prejudice the enforcement by any person of
any right or claim against any person ceasing to promote a pyramid selling
scheme by reason of this Ordinance.
3. Offence of promoting a pyramid selling scheme.
Any person who knowingly promotes a pyramid selling scheme commits an
offence and is liable on conviction upon indictment to a fine of $ 100,000
and to imprisonment for 3 years.
4. Liability of directors, partners etc.
(1) Where an offence under this Ordinance has been committed by a body
corporate or member of a body unincorporate, any person who at the time of
the offence-
(a) in the case of a body corporate, was a director, secretary, principal
officer or manager of that body corporate; or
(b) in the case of a member of a body unincorporate, was a partner or
office holder in or a member or manager of that body unincorporate,
or who, in either case, was acting or purporting to act in any such
capacity commits a like offence.
(2) Where any person referred to in subsection (1) is charged with an
offence under this Ordinance it shall be a defence for him to prove that
the offence was committed without his consent or connivance and that he
exercised such diligence to prevent the commission of the offence as he
ought to have exercised having regard to the nature of his functions and
to all other circumstances.
5. Power to award compensation.
(1) Notwithstanding any provision in any other Ordinance, where a person
is convicted of an offence under this Ordinance the court may, in addition
to passing such sentence as may otherwise be passed by law, order the
person so convicted to pay to any person who has suffered financial loss
resulting from that offence, such amount as compensation as it thinks
reasonable.
(2) An amount ordered as compensation under subsection (1) shall be
recoverable as a civil debt by the person in whose favour the order is
made.
6. Saving of rights and claims.
Nothing in this Ordinance shall prejudice the enforcement by any person of
any right or claim against any person ceasing to promote a pyramid selling
scheme by reason of this Ordinance.
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