World Luxury Association Under Fire In Fraud Scandal

Likely To Lose Official Credentials Ouyang Kun, founder of the World Luxury Association. The Beijing Administration for Industry and Commerce announced this week that it plans to revoke the license of the World Luxury Association (WLA) due to fake registration materials, reports the Chinese newspaper Beijing Youth Daily. The WLA has been identified as a shanzhai (山寨), a word originally meaning “mountain village” that now roughly translates to “knockoff.” Since its release, the news has become a hot topic of discussion on Weibo and has been reposted by China’s major state-run media outlets Xinhua and China Daily. According to the report, the head of the administration is expected to announce the revocation of the organization's license by July 6. According to the newspaper reporter, WLA founder Ouyang Kun did not show up at a hearing held last Wednesday on the matter, but was rather represented by his lawyer. The investigators said that Ouyang Kun tried to fabricate several reasons to delay the investigation, and set up obstacles for evidence collection. Although the administration has announced that it plans to revoke the WLA's license, the company's lawyer has denied all wrongdoings and has requested to dismiss the case. Ouyang Kun's extremely humble Weibo cover photo. (Ouyang Kun/Weibo) The article states that the WLA's corporate registration address shows that it is located at a residential address in Beijing's Dongcheng district, but building owners say that they never signed any rental agreement with the company. The reporter also discovered that the company's legal representative is not Ouyang Kun, but an unspecified person in possession of a British passport who has also avoided investigation procedures. Investigators have expressed doubt about the authenticity of this unnamed person’s handwriting, stating that multiple copies of the signatures look very different. Followed by 242,686 fans, Kun's Weibo account is still active at the time of posting. On his Weibo, he claims to be the Chief Representative of the WLA's China office and Secretary of the China Luxury Trade Commission. Claiming itself as a non-profit organization with headquarters in New York on its website, the WLA released a report on “the top 100 global luxury brands” last year, but its credibility was called into question by media outlets such a Sina, which referred to many of the brands listed as second-tier. Since its release, the report had stirred public doubts about the institution’s integrity, with many industry insiders and media believing it to be fraudulent. In March, CCTV reported that the company’s operations were rife with fraud, and both its clients and formal staff disclosed fraudulent activities surrounding its organization of events and exhibitions. According to Sina, reporters tried repeatedly calling the phone number listed for WLA's headquarters in New York day and night, but have always received an answering machine. Netizens also found that the institution is not officially listed as a United States non-profit organization. Now that China has become the luxury sector's largest market in the world, we have seen many luxury-associated organizations spring up. As China's luxury industry is still in its infancy, luxury brands, retailers, and consumers must be cautions before putting trust in a luxury-related organization without first conducting proper research.

World Luxury Association Under Fire In Fraud Scandal

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Published July 01, 2013

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World Luxury Association Under Fire In Fraud Scandal