Hyderabad: It is said to be a coordinated action that the Union Ministry of Corporate Affairs on Tuesday initiated winding up proceedings against Vihaan Direct Selling Pvt Ltd, where a QNet sub-franchisee allegedly running ponzi schemes. On Tuesday, the Cyberabad Police Commissoner VC Sajjanar announced the arrest of 70 persons so far in 38 cases registered against the company, issue of notices to seven film personalities as well as the freezing of Rs 2.7 crore deposits related to the promoters.
The cases has been registered under various police stations of Cyberabad Commissionerate, pertain to alleged multi-level marketing schemes involving QNet.
Police Commissioner of Cyberabad, VC Sajjanar, said that notices had been served to actors Anil Kapoor, Shah Rukh Khan, Boman Irani, Jackie Shroff, Vivek Oberoi, Pooja Hegde and Allu Sirish for participating in the company’s programmes. While Anil Kapoor, Shah Ruk Khan and Boman Irani responded to the notices through their advocates, replies from the other celebrities are awaited.
NOTICES SERVED TO CELEBS
T he Economic Offences Wing (EOW) of the Cyberabad Police had served notices to several film personalities, including Anil Kapoor, Shah Rukh Khan, Boman Irani, Jackie Shroff, Vivek Oberoi, Pooja Hegde, Allu Sirish and Yuvraj Singh for participating in the company’s shady schemes.
Although Anil Kapoor, Shah Rukh Khan and Boman Irani have responded to the notices through their advocates, replies are awaited from the other celebrities. Notices were given also to top 500 promoters of the scheme.
The police have approached the Reserve Bank of India to know if the firm has permission to operate its investment schemes as they involve collecting funds from the public.
The police have also written to the Serious Fraud Investigation Office (SFIO), Registrar of Companies (RoC) and GST wings. The Cyberabad Police have also written to various investing agencies seeking assistance in the investigation.
The Enforcement Directorate has been requested to probe the money laundering and tax evasion by QNet. The Income Tax Department has been requested to share details on the filings of returns by the firm.
In February, the company had denied any association with celebrities, actors and cricketers who had promoted their brand. The multinational company is accused of duping 20 lakh investors by running an illegal money circulation scheme and laundering Rs 20,000 crore.
Vihaan claims to have approximately 6 lakh registered Indian customers in its database with audited revenues for 2017-2018 at Rs 624 crore. QNet said neither it nor Vihaan was banned by any court of law in India.
Response of three celebrities
“The responses of the three celebrities are being studied,” Sajjanar said. Notices have also been served on top 500 people pushing the Ponzi schemes. Their replies are awaited. Lookout circulars have been issued against 12 people associated with the company as directors and promoters.
This follows claims made by the Financial Frauds Victims Welfare Association that the company, in the garb of direct selling and e-commerce, had sent over Rs 20,000 crore out of India.
Quick on the uptake, QNet on Tuesday denied the allegations. In a statement, it said the public notice by the Ministry of Consumer Affairs was premised on the purported report of the RoC. Terming the report “fallacious, without merit and prepared without basis and understanding of the business”, QNet said it had challenged the report at the appropriate judicial forum.
- Notices issued to seven noted film personalities
- Police freeze promoters’ deposits totaling Rs 2.7 crore
- Look-out circular issued against 12 promoters/directors, 500 others
However, according to the Cyberabad Commissionerate, cases were also lodged against the firm and its promoters in different states in India. Vihaan Direct Selling Pvt. Ltd was a sub-franchisee of QI Group in India, marketing various schemes under the brand name of Q Net.
Sleuths of Cyberabad Police cracked down on the units of the firm in various parts of Telangana, Andhra Pradesh, Bengaluru and Delhi, said the Police Commissioner.
Eight of the 38 cases registered against QNet Company in Cyberabad were under investigation with CID of TS, he mentioned. Referring to seizures in the case, the Police Commissioner said that the godown of Vihaan Direct Selling Pvt. Ltd. at Bangalore and the office of Transview Enterprises (A marketing agency for QNet products) were seized.
An amount of Rs. 2.7 crore was frozen in the bank account of Vihaan Direct Selling Pvt. Ltd. QNet, the main subsidiary of the QI Group, was founded by Vijay Eswaran and Joseph Bismark in Hong Kong in 1998. Trevor Kuna, who joined QNet in 2008, was the Chief Marketing Officer. He is said to have been appointed as CEO of QNet.
The company operates in a number of countries like India, the Philippines, Cambodia, Nepal, Indonesia, Turkey, Saudi Arabia, Russia and etc. In India, QNet appointed Vihaan Direct Selling Pvt. Ltd. as its sub-franchisee. Dilipraj Pokkella and Md. Imthiyaz are said to be its directors.
Explaining their modus operandi, the Police Commissioner said that initially the promoters approach newcomers claiming that there are various business projects such as cost optimization business, health and wellness products, watches and jewelry, personal care and beauty, tour packages, education packages (SMC MBA Certification) etc.
Later, the gullible ones are trapped by sweet talk, which includes building castles in the air and stating that they would be a part of the “QNet Kingdom” where they can build their own future.
They also promise a refund within a month should they want to back out, but invariably drag the time period with training sessions etc.
Once the newcomer joins through a referer/promoter, he becomes Independent Representative (IR). After paying the money, the newcomer gets some products and the promoter gets commission.
The promoter then asks IR to enroll two other members for commission. As the number of persons increases down the line the up-liners get more and more money as commissions.