"When Kambuja truly awakens, then Asia will tremble." Vijay Eswaran, QI founder.

T he mood was somewhere between a church revival and a heavyweight boxing championship.

One by one the company directors entered the conference room, smiling broadly - one punching the air - to the cheers of more than 500 people and thumping dance music.

Each of the well-dressed young Khmers had paid $5 to attend the March 14 launch of the Angkor Wat commemorative coins and pick up a starter kit to help them sell the expensive collectibles.

They were the latest recruits to QuestNet, a network marketing business described as a life-changing opportunity by its fans and a dangerous pyramid scheme by its critics.

Established in 1998, QuestNet's parent company, QI Ltd, has expanded rapidly and now claims 750,000 customers in 168 countries and a turnover of $178 million last year. This makes them one of the biggest e-commerce companies in Asia. More than a dozen subsidiaries offer products ranging from vacations and telecommunications to investment advice and medallions, all of which are aggressively marketed through QuestNet.

The lavish show put on in Phnom Penh was held to introduce three new products specially designed for the Cambodian market: a quarter-ounce, 24-karat gold coin for $600; a five-ounce silver coin for $590; and a gold medallion watch for $580. The coins are being promoted as part of The Mayer Mint's Wonders of the World series, despite the fact that Angkor Wat does not make the official list of the seven wonders of the ancient world.

The event was spiced up by Apsara dancers, spear-wielding bodybuilders in Angkorian costume and a giant cardboard cutout of Angkor Wat.

But behind the glitzy promotion lies a controversial past.

In 2003, Indian police arrested two senior managers at the Chennai headquarters of QI and froze the bank account of the company after receiving complaints from more than 50 of its members.

About the same time, the Philippines' Department of Trade and Industry issued a cease and desist order to the company on the basis that the wholly foreign-owned company should not have been engaged in retailing. They had also received a complaint from a member.

The Royal Monetary Authority of Bhutan, which is cited as the issuing authority for the Angkor Wat coins, was reported to have warned Bhutanese citizens not to be fooled by promises of easy economic returns.

But managing director of QuestNet, Richard Zinkiewicz, said each of these cases stemmed from misunderstandings. In India, the problem was that customers didn't understand the concept of paying for the products in installments. In Bhutan, the warning was the snowball effect of an uninformed bank official. To back this up, he provided a copy of a February 18 letter from the Bhutanese Royal Monetary Authority that confirmed the re-signing of their exclusive contract for minting and distribution until the end of 2006.

Zinkiewicz insisted QuestNet was not a pyramid scheme, because customers are never obligated to sell products and what people buy has real value. He said no charges have ever been filed against the company and noted the company's operations in Hong Kong (from where it ships all products) and Singapore as evidence of its financial integrity.

"We create an exclusive, high-value product which has strong potential for appreciation," said Zinkiewicz, citing the high prices paid by collectors for full sets of plastic McDonalds giveaways as an example of the lucrative market they hope to tap.

"We have a very aggressive and very rewarding business model that provides a win-win opportunity for people who put in the effort, but this is not a free ride. It is not a free lunch," Zinkiewicz said.

That opportunity - and the source of much of the controversy surrounding the company - is QuestNet's use of network marketing to sell products and services. The scheme seems simple enough: customers can choose to become "independent representatives" (IRs) of the company, paying $10 for a starter kit and an "online office".

IRs receive a $250 commission after they introduce QI products to six people, placing three people on their left and three on their right, described as the two "legs" that keep the IR - and the company - walking towards profit.

In a complex addition, when an IR introduces a new customer, who then becomes an IR themselves and promotes products, the original IR can benefit from the success of their recruit. But these bonus points can only build up one leg of the original IR, who must then find recruits for the other leg in order to receive commissions.

It is this structure that has attracted the interest of authorities across Asia and beyond.

"GoldQuest is a pyramid scheme," wrote Bille Branscum, a former special agent with the US Department of the Treasury who now investigates financial crimes for law firms.

"These are predators. They leach wealth from relatively young, unstable economies, leaving trinkets, dashed dreams and empty promises in return," Branscum told the Post be email.

He claims that there is no independent market for the commemorative coins, and that they are priced too high for the value of the precious metals used. With gold currently valued at $441 per ounce, QI stands to earn about 540 percent profit on the sale of each Angkor Wat gold coin.

However, Zinkiewicz said the value of the coins lies not just in the raw material but the fact the coins are limited-edition collectibles which may appreciate in value.

Searches of eBay and Heritage Coins Web sites found no mention of the Angkor Wat coins or the Pope John Paul II coin the company touts as a success story and reportedly was endorsed by the Vatican. Although stressing he was not a numismatics expert, Zinkiewicz predicted the Angkor Wat series could double in value in six years.

The company couldn't say how many of the Angkor Wat coins and watches had been sold in Cambodia but said that half of the 4,999 minted had already been snapped up since the international launch in Dubai last November.

The company is negotiating to have the coins accepted as legal tender by the National Bank of Cambodia, and directors have been careful to include the government in their foray into the kingdom.

A day before the coins were launched, QI directors donated $10,000 to the Cambodian Red Cross, accepted by CRC president Bun Rany, wife of the prime minister.

Thong Khon, secretary of state at the Ministry of Tourism (and "the man who got Phnom Penh back on its feet," according to one QI director), attended the launch and made a short speech before receiving a $580 gold watch.

But if government officials received a warm reception, it was tame in comparison with the hype that surrounded Vijay Eswaran, the Indian founder of QI, who was referred to as "the visionary and the glue that holds us all together" by a regional manager.

Eswaran didn't disappoint, unleashing a volley of motivational cliches and historical comparisons to illustrate how Cambodia - or Kambuja as he referred to it - could recover from its tragic past.

"When Kambuja truly awakens, then Asia will tremble," said Eswaran.

"This is not a big event," he said of the 500-strong crowd. "The next time we come here, we will have 5,000."

The crowd responded with enthusiastic applause and cheers of "Cambodia, soksabai, soksabai, soksabai" that they had rehearsed before the event started.

He told the audience that the opportunities offered by QI could change their lives.

Chan Trey, a 28-year-old garment factory accountant, was among the crowd. She had already bought an Angkor Wat watch for herself and was confident she could convince friends to purchase QI products, although she has had no luck yet.

"I have tried, but I haven't had enough free time," she said.

QuestNet couldn't say how many Cambodians had become IRs, but said they had 2,000 customers, each with the opportunity to become involved in marketing.

The Post tried to speak with other members of the audience, but was interrupted on two occasions by a Khmer-speaking crew captain assistant, Jackie Hin. He placed his index finger over his lips to silence one young man, who then walked off mid-sentence. Another man was telling the Post he was having a "great time" at the launch and had signed up as an IR to "get money better than [if] I work", before being warned off and refusing to give his name.

After a short break and a glass of water, the IRs returned inside to continue a training and motivational session that lasted until about 11:30 p.m.

Meanwhile, in the hotel lobby, the managing director of Quest Vacation International, Joachim Steffan, told the Post of his interest in developing a resort in Sihanoukville.

He said two company representatives accompanied Thong Khon on a day trip to look at investment prospects, saying he was considering "an island, a piece of dirt and a joint venture" with an existing resort.

Steffan said he had recently acquired a resort in Koh Samui and a condominium in Phuket, a development deal in Bali and bought a German travel company dealing with 40,000 package holidays a year.

The Sihanoukville project would likely have a "wilderness theme" and a "curative touch", but Steffan said it was too early to discuss any specific plans. He plans to return later this month for further research.

In the meantime, the network of Cambodian IRs will begin the task of trying to convince their friends and family to invest in a commemorative coin of their national icon.

"We see this as a first step in getting involved in Cambodia," said regional manager Donna Imson during an impassioned pep talk at the launch.

"I know the spirit of the men and women who built Angkor Wat lives inside all of you."