QNet: “It is a chain where a person is fooled and then he is trained to fool others to earn money” says Bombay HC order

The Bombay High Court while rejecting anticipatory bail applications of five accused in the multi-crore QNet scam, has observed that "the deceit and fraud is camouflaged under the name of e-marketing and business". This scheme is undoubtedly a multi-level marketing (MLM) activity and a pyramid structure of such scheme is prepared so that the members are promised to get money on purchase and sale of products, the Court said.

 

 

 

In a hard-hitting order on 6 May 2016, Justice Mridula Bhatkar said, "The motto of the company 'sell more, earn more' appears very attractive and innocuous. However, this motto is fully camouflaged. The company stands on a basic statement that people can be fooled. Thus, the true motto is 'sell more earn more' by fooling people. In fact it is a chain where a person is fooled and then he is trained to fool others to earn money. For that purpose, workshops are conducted where study and business material is provided with a jugglery of words, promises and dreams. Thus, the deceit and fraud is camouflaged under the name of e-­marketing and business."

 

"It has very grave and serious impact on the economic status and mental health of the people on a large scale. On considering parameters of section 438 of the Code of Criminal Procedure, I am not inclined to protect the accused. It won't be out of place to mention that such circulation is required to be stopped. It is necessary for the prosecution to take injunctive steps against this business activity, which is prima facie, illegal. Though by stopping this business, a large group of people may get financially affected, however, it will save larger groups of people from becoming prey of this activity," the Bombay HC said. 

 

The HC rejected bail applications of five including, Srinivas Rao Vanka and Magaral Veervalli Balaji, both directors of Vihaan Direct selling (India) Pvt Ltd, Suresh Thimiri, director of Transview Enterprises India Pvt Ltd, Malcolm Nozer Desai, who is a 20% stakeholder in Vihaan and Michael Joseph Ferreira, former world champion of billiards and an 80% stakeholder in Vihaan.

 

"I have gone through the plan which is given by QNet to every individual representative (IR)," Justice Bhatkar said. "I have gone through the statements of many witnesses, who claimed that they have been cheated under the scheme launched by QNet. I have also considered the conclusive report of Serious Fraud Investigation Agency (SFIO) under the Company Act) SFIO Prima facie, there is material to hold that the business conducted by Qnet is covered under PCMC Act and also under Drugs and Magic Remedies (Objectionable Advertisements) Act, 1954."

 

"However," the Bench added, "the things are not as straight as they are perceived on the surface. Assuming that the scheme was launched with a noble object to give benefit to maximum people to make money quickly and easily by selling products of the company, however, after going through the material placed before me including the statements of the witnesses, I am of the view that in the mid­way, the intention of the applicants/ accused, who are the directors and shareholders of the company, became dubious. They had knowledge that more members are suffering financial losses and they are not satisfied with the products. The claim that the wellness products i.e., Biodisk and Chi Pendent are medicinal and spiritual products, are after all, a matter of faith. However, the applicants/ accused have launched these wellness products with ulterior motive and with correct judgment of vulnerability of the people. The holiday packages, which were sold or offered, without any choice left to the buyers. The entire business was Internet based and, therefore, the persons who are responsible i.e., the top brass i.e., the applicants/ accused, were not approachable to the persons who were aggrieved. The nature of the business was knitted in the interest of the Directors and shareholders in such a manner that the persons who are at the lower level of the pyramid cannot get any access to put up their grievances. The manner in which the persons were contacted, incentives offered, the workshops were conducted, are best examples of inducement."

 

Earlier, Pradeep Gharat, special Public Prosecutor submitted before the Bench that Vanmala Hotels, Travels and Tourism Services Private Ltd and Pallava Resorts Private Limited have created a Website and travel packages. "The commission was not paid on the products though the new members were introduced. The registered office of Vanmala Hotels, Travels and Tourism Services Pvt Ltd company is a call center," he said. 

 

He further submitted that in December 2014 the Ministry of Corporate Affairs sealed their office at Chennai and declared Gold Quest International Pvt Ltd and QuestNet Enterprise (P) Ltd as the fraud companies. "Thus, money is collected on­line and though the Independent Representative number is given, actual money was not available for withdrawal. Said money was laundered outside India. The police in the investigation have come across 73 bank accounts of Q Net Ltd and total laundering of is around Rs135 crore," Adv Gharat had said.

 

Below is the order passed by the Bombay HC…

 

 

Earlier in February 2016, the special Maharashtra Protection of Interest of Depositors (MPID) Court had also rejected anticipatory bail applications of these five. The Economic Offences Wing (EOW) of Mumbai Police, which is probing the case, had invoked the stringent MPID Act against controversial multi-level marketing (MLM) company QNet, which has denied any wrongdoing on its part.

 

Gurupreet Singh Anand, a computer consultant from Lokhandawala, Andheri in his first information report (FIR) stated that his wife was duped for Rs30,000 by some people who had introduced themselves as the independent representatives (IRs) of QNet. 

 

While arguing before the HC in person, he contended that the illegal money circulation scheme is being conducted in India by changing names from GoldQuest to QuestNet to the current QNet.

 

Earlier, the SFIO in its detailed ‘secret’ report on GoldQuest International Pvt Ltd and Quest Enterprises India Pvt Ltd has called multi-level marketing (MLM) schemes run by overseas operators as “a potential threat to national security”.

Wanted QNet fraud director( V Managing Director Pathman Senathirajah) takes selfie with South Indian superstar Rajnikant

 

Ranjit Mahanti

PATHMAN Senathirajah, the owner and director of the V-group of companies wanted by the Mumbai police in the QNet fraud, was spotted taking a selfie with South Indian superstar Rajnikant. On February 5 around 7pm Pathman posted a picture on Facebook taking a selfie with Rajnikant. As Rajnikant is a superstar from the cinema worls, the selfie went viral. According to reports, at present Rajnikant is in Malaysia for the shooting of his movie Kabaaali. Rajnikant is not involved in any scam but QNet members are using his pictures everywhere.

Pathman Senathirajah is a Malaysia-born businessperson. A lawyer by profession, he started his network marketing career with the direct-selling company QNet in the late 90s. He is now a V-Partner and also heads the ‘V’ as it’s Managing Director. He is wanted by economic offences wing (EOW) of the Mumbai police.

QNet, the controversial Hong Kong-based multi-level marketing (MLM) operator with multiple names (GoldQuest, QuestNet, QNet, QI Ltd and QI group are the better-known names) has finally come under the radar of Mumbai police. Police have registered an FIR against QNet, for allegedly duping thousands of investors by selling them plastic and glass products terming them miraculous objects for treating severe diseases like cancer.

The FIR names five accused, including QNet’s Hong Kong-based founder Dato Vijay Eswaran and Senathirajah. In the Chennai QuestNet chargesheet, Sanathirajah’s brother is also an accused and has been declared absconding. More than 31,500 investors have given their statement against QNet in Chennai.

Court rejects anticipatory bail applications of Padma Bhushan Michael Ferreira in QNet scam

THE special Maharashtra Protection of Interest of Depositors (MPID) Court on Tuesday rejected anticipatory bail applications (ABA) of Padma Bhushan and former world champion of billiards Michael Joseph Ferreira in the multi-crore QNet scam. The Economic Offences Wing (EOW) of Mumbai Police, which is probing the case, had invoked the stringent MPID Act against controversial multi-level marketing (MLM) company QNet.

In February 2014, the Enforcement Directorate (ED) registered a case under the prevention of money laundering act (PMLA) against QNet, Vihaan Direct Selling, Ferreira and QNet founder Vijay Eswaran and three other independent representatives (IRs) of the MLM operator.

The accused which failed to get ABA includes, directors of Vihaan Direct selling (India) Pvt Ltd Srinivas Rao Vanka and Magaral Veervalli Balaji. Director of Transview Enterprises India Pvt Ltd Suresh Thimiri. Malcolm Nozer Desai, who is 20% stakeholder in Vihaan. Ferreira also have 80% stakeholder in Vihaan.

According to media reports, Transview Enterprises is an associate company of Vihaan Direct Selling Pvt Ltd that handles QNet’s multi-level marketing (MLM) operations in India since 14 April 2012. Vihaan Direct Selling, in which Michael Ferreira, the former world billiards champion, owns 80% stake, is a direct selling agent of QNet and had done large financial transactions with Thimiri’s company Transview.

The EOW had booked several accused including Ferreira and five companies related with QNet, under the MPID Act. Until now, the accused were being investigated for cheating and forgery under the Prize, Chits and Money Circulation Schemes (Banning) Act 1978, and for money laundering by the Enforcement Directorate (ED).

In September 2014, EOW of the Mumbai Police Crime Branch has arrested Susan Chatterjee, the former daughter-in-law of Ferreira in connection with the alleged Qnet scam. Police found around Rs 1.70 crore in her bank account, which were earned by Qnet through its binary scheme.

Why is media silent about the Qnet scam?

It's and absolute scam. It's a pyramid scheme, which is an unsustainable business model. Those fools who have already enrolled would act as if they are earning huge through this, just to entice and lure. Once in, you will figure out that you have been made a scape goat and will shamelessly lure people so as to recover the huge sum you paid. Besides losing money, you will eventually lose respect, self-esteem, confidence, become depressed and looked upon as a joker.

Here is the Facebook post I made after a few such encounters:

Scene 1:

While I m casually browsing through books at Landmark or Crossword or while waiting for the bus, some guy would smile at me and start a conversation. He would flatter me and finally with the statement, "let's keep in touch", would ask for my mobile no. I m flattered and would end up sharing my mobile no.

Scene 2:

A few days later, I would get a phone call from this guy whom I met at the bookstore or bus stop. Ha ha ha... All these jokers who called me would exchange pleasantries and then make the next statement "We are actually working on a wonderful business alongside a few people from IIT/IIM and are looking for likeminded people to expand. I think you have the potential and would be a great fit, besides you can make big bucks in a short while." When I ask, could you please explain in detail, the reply would be "It's difficult to explain it on phone. I ll arrange for a detailed session where you can get all your queries answered"

Scene 3:

By mistake I went one such session. The hall or the house where these sessions would be filled with people who had already fallen into the trap along with the newly found scapegoats they would have brought in. And those who had already fallen into the trap of MLM, though desperate inside to sign the next scapegoat would act as if they have made millions. Then, a guy would come on stage with an artificial enthusiasm and shoot out questions like, "What do u do on weekends? Do you think u can survive on your meagre salary? Why not explore options to earn part time, while you continue your regular job? I will show you the way to earn big bucks. You just need to spend half an hour daily or a few hours on the weekend" By falsely hyping all this, those desperate jokers would try to brainwash and make you the next scapegoat. If you don’t agree, 4-5 guys would join together, hype and put a mental pressure to sign up under them. - Do not budge under pressure.

Scene 4:

QNet: Mumbai police issue lookout notice against 10 including Michael Ferreira, Vijay Eswaran

Mumbai Police have issued lookout notice against 10 people including QNet founder Vijay Eswaran and former billiards champion Michael Ferreira in the Rs425 crore QNet scam case

The economic offences wing (EOW) of Mumbai police has issued lookout notices against 10 people including Michael Ferreira, former World Billiards Champion and Padma Bhushan awardee, after he failed to turn up for questioning in the QNet scam case. Other people against whom the lookout notice has been issued include QNet founder Vijay Eswaran, its vice president Dev Wadhwani and Sachin Gupta.
Vijay Eswaran with Michael Ferreira (circled) at one of the promotional events of QNet

According to sources, EOW has also issued notices against six other officials and leaders of QNet. However, their names were not revealed by the sources.

Ferreira was summoned by the EOW in connection with the Rs425-crore scam allegedly committed by multi-level marketing (MLM) operator QNet. The former world champion is founder of Faith, which was started as a distributor network under the QI brand.

Last month, while speaking with news channels, Ferreira, who has gone abroad some time back, had said he would appear before the investigators as soon as he returns to India. He even defended the controversial company.

The Padma Bhushan awardee had told the channels that "three to four days ago, the summons was received at my home (in Mumbai) in my absence. I am abroad now. The summons was handled by my lawyer and I understand he is co-operating fully."

Responding a query, he had said "of course, I shall make myself available (before the Economic Offences Wing of the Mumbai police). I have the highest regard and respect for the police. As soon as I am cleared to travel, I will appear before the EOW. I am undergoing a lot of stress at the moment."

However, former World Billiards Champion did not turn up before the EOW, which resulted in police issuing a look out notice against him.

Others against whom the EOW has issued lookout notices, include Dev Nanik Wadhwani. He is founder of team Infinity, the most aggressive team of QNet's independent representatives (IRs) at present in India. Sachin Gupta is one of the so-called 'top leaders' of QNet from Mumbai and according to sources may have fled to Dubai.

QNet operates in India through its official franchisee Vihaan Direct Selling Pvt Ltd, which carries the company's brand name in the country. Ferreira owns 80% stake in Vihaan Direct Selling with Malcolm N Desai holding the rest. Desai had already approached the Sessions Court in Mumbai for an anticipatory bail fearing that the EOW may arrest him soon.

According to Faith Egypt , Michael Ferreira is the founder of 'Team Faith' that is involved in hard selling QNet scheme. Talking about Ferreira, it says, "As an individual, in a very short space of time he (Ferreira) was in the list of the top 30 earners and under his astute stewardship he provided the platform, environment, guidance, training and inspiration to his flock, many of whom are earning incomes beyond their wildest dreams."

Showing a clear link between, Ferreira, QNet and its founder Vijay Eswaran (one of the accused in the cases against the MLM operator), the portal says, "The core leadership of Faith is today in a position to concentrate more sharply on those who still remain vulnerable to the “slings and arrows of outrageous fortune” so that each one of them develops into lead birds of their own teams, all fiercely loyal to Faith, its philosophy and its ideals and to the values espoused by its visionary and mentor Dato Vijay Eswaran."

Faith Egypt, also reveals names of other people, like Mark Ferreira, Malanie Sequeira, Lata Hegde and Manjunath Hegde, all of whom are associated with QNet. In August 2013, the EOW had arrested Bandra-based Manjunath Hedge for cheating in the QNet case. The EOW searched his house and seized computer hard disc and several incriminating documents, including some payment/ commission receipts.

As reported by Moneylife, QuestNet and GoldQuest, the MLM companies that had shut shop in 2009 following police action are back with a bigger bang. They now call themselves as QNet and are thriving in an environment where tens of thousands of Ponzis and MLM companies are able to lure people into believing that they have the formula to instant riches and a high growth career.

QNet: The Suresh Thimiri link between Vihaan and Transview

Mr Thimiri, the so-called CEO of the controversial MLM, owns registered trademark of QNet in India. He also admitted before the High Court that his company Transview imports and manufactures products for selling to Vihaan Direct, the official franchisee of QNet in India

The case of QNet, the Hong Kong-based controversial multi-level marketing (MLM) operator is taking new twists every day even as all top executives of the company in India decided to stay hidden citing a case filed with economics offences wing (EOW) of Mumbai police.

Interestingly, Suresh Thimiri, who is often touted as QNet India's chief executive and had denied any relationship with QNet or any of its representatives, owns the 'QNet' trademark in India through his company Transview Enterprises Pvt Ltd! See the images below obtained from Trade Marks Registry. Mr Thimiri's company has filed class 42 application for 'QNet' trademark in India.



As Moneylife reported, Mr Thimiri, in his anticipatory bail application filed on 19 August 2013, before additional session Judge DA Dholkia had said, "The applicant (Thimiri) does not hold any sort of relation neither with the Company (QNet) nor its representative (including Eswaran and Vihaan Direct Selling India Pvt Ltd) against whom the Complaint has been lodged by the respondents (Gurupreet Singh Anand) in Oshiwara Police Station." (See image below)

Transview Enterprises is an associate company of Vihaan Direct Selling that handles QNet's MLM operations in India since 14 April 2012. Before that QNet's Indian operations were controlled by QuestNet Enterprises (India) Pvt Ltd, a company registered at Chennai. QuestNet Enterprises was operating QNEI eStore, a platform from where IRs, which is how the investor-dealers of QNet are described, could place orders or buy products and also enrol new recruits. After launching Vihaan, the company asked all its old IRs to mandatorily register under the new business name in order to receive their commissions. Vihaan is a direct selling agent of QNet and had done large financial transactions with Mr Thimiri's company Transview. This made the EOW to freeze Transview's bank accounts in ING Vyasa Bank at Bengaluru.



Mr Thimiri, who in his anticipatory bail application had denied any relations with QNet and its representative, has ratified deals between Vihaan Direct Selling and his company, Transview Enterprise.

In his application before the Bombay High Court to defreeze bank accounts of Transview Enterprise, Mr Thimiri said, "The applicant (Mr Thimiri, director of Transview) is in the business of importing and manufacturing products such as Bio Discs, Chi Pendants, Nutriplus, Homepure, watches and various other products and sells the same to M/s Vihaan Direct Selling India Pvt Ltd."



These revelations may come as shocker to few die-hard independent representatives (IRs) of QNet as they strongly believe that all QNet products are imported! From where? Only the company knew about, as it is kept hidden from public view. Anyway, now with Mr Thimiri's clarification about 'manufacturing' of QNet products, these IRs will know the truth.

After perusing both the applications filed by Mr Thimiri before Courts, here are some facts...
1. Mr Thimiri accepted that Transview does not have any relations with Vihaan Direct Selling except supplier-purchaser relations.
2. Mr Thimiri's Transview Enterprise owns the QNet trademark (used exclusively by Vihaan) in India.
3. Vihaan Direct Selling is QNet Ltd's franchisee that carries the QNet brand name in India. After launching Vihaan, the company asked all its old IRs to mandatorily register under the new business name in order to receive their commissions.
4. Mr Thimiri has been named as accused in the report submitted by the EOW before the Sessions Court, Mumbai. It states: “The accused Suresh Thimiri has played active role in running the Money Circulation Scheme under the guise of investment opportunity and the income earned by the participants is based on enrolment of new members into the scheme.”

While Mr Thimiri is trying very hard to de-link himself from the probe, his own submissions are revealing truth. Vihaan Direct Selling carries 'QNet' brand in India that is registered trademark of Transview Enterprise of Mr Thimiri. The submission made by Mr Thimiri before the Courts only underline his links with QNet in India.

Another interesting aspect in the whole episode is all top officials (?) of QNet India do not want to reveal their identity and remain hidden. We repeatedly sent emails to the company's official PR agency and also some officials from its parent QI group.

We asked "Can you please tell us about Mr Suresh Thimiri, who is often labelled as India CEO of QNet on QNetIndia's Facebook page. Is Mr Thimiri the CEO of QNet in India? If not, then who heads QNet in India and who are the top management people? In addition, we would like to know the relations, if any, between QNet, Vihaan Direct Selling India Pvt Ltd and Transview Enterprises Pvt Ltd."

Here is the reply we received from the PR agency of QNet India...
"This is apropos our telecon now a while back and in furtherance to our earlier discussion which took place on the 30 August 2013 with regards to our client QNET, referred by you in your email. On your request, we reached out to our client again today, but they were of the same considered view that since the matter is still sub-judice, they would not like to give any comments for the time being. We will be happy to reach out to you should our client decide to make any statement to the media in the future."

QNet: EOW arrests V-Elite leaders Sandeep Kalra and Hitesh Miglani

Kalra from Delhi and Miglani from Bangalore have had pocketed lakhs of rupees through the MLM scheme and organised several training camps to lure investors. Both were intercepted by immigration authorities as their names were on a look out circular issued by EOW

The Economic Offences Wing (EOW) of Mumbai Police arrested Sandeep Kalra and Hitesh Miglani, senior independent representative (IR or agents) of controversial multi-level marketing (MLM) company QNet. Both were picked up from Delhi International Airport. Meanwhile, the MLM and its leaders are also booked under the Drugs and Magic Remedies (Objectionable Advertisements) Act, 1954 as well for selling plastic and glass products terming them miraculous objects for treating severe diseases like Cancer.

 

Kalra and Miglani were intercepted by immigration authorities at the Indira Gandhi International Airport at Delhi last night, say media reports. Both belong to the ‘Infiniti’ team at QNet and part of V-Elite leader’s team. 

 

The duo, who arrived from Dubai in separate flights, was stopped at the airport as Look Out Circulars (LOC) were issued against them by the EOW probing the case. 

 

The two suspects, who were suspected to have had pocketed lakhs of rupees through the scheme and organised several training camps to lure investors, have been subsequently brought to the metropolis and placed under arrest this evening, police said.

 

The LOCs have been issued against those whose statements have been necessitated in the probe but did not appear before the investigators despite summons.

 

Kalra hails from Delhi while Miglani is from Bangalore, police said adding that this is the first arrest of those against whom LOCs had been issued.

 

The EOW had earlier arrested 15 persons for allegedly duping investors by selling QNet products, including magnetic disks, herbal products and holiday schemes, through allegedly fraudulent means.

 

The EOW has invoked the stringent Maharashtra Protection of Interest of Depositors (MPID) against the company which has denied any wrongdoing on its part.

 

QNet has also been accused of using the banned binary pyramid business model. An FIR in the case was registered in August in 2013. The accused had been charged with cheating and forgery under relevant sections of the Prize, Chits and Money Circulation Schemes (Banning) Act, 1978.

 

EOW booked 19 accused including Michael Ferreira, the former world champion of billiards and five companies related with QNet, under the MPID Act. This means all the cases against QNet, Vihaan and all those involved in the MLM scam would be heard before the special MPID Court. Until now, the accused were being investigated for cheating and forgery under the Prize, Chits and Money Circulation Schemes (Banning) Act 1978, and for money laundering by the Enforcement Directorate (ED).

 

Gurupreet Singh Anand, a computer consultant from Lokhandawala, Andheri in his first information report (FIR) stated that his wife was duped for Rs30,000 by some people who had introduced themselves as the independent representatives (IRs) of QNet. Anand told the police, “They (IRs) had said that one of the bio-products my wife bought could be used to treat my 12-year-old son's brain-related diseases.”