QNET: Massive Crackdown By Cyberabad Police, Scam As Big As Rs 5000 Cr

General News

In a massive development in the QNET scam, the Ministry of Corporate Affairs has now taken note, even as the Cyberabad police continues its crackdown

Written By Navashree Nandini | Mumbai | Updated On:

In a massive development in what is being called as one of the biggest ponzi scams - the QNet scam, Cyberabad Commissioner of Police said that the scope of the scam could be as big as of Rs 5000 crores. On Tuesday, Cyberabad Police in a press conference said that they are winding up the companies related to QNet and while the process of investigation will continue, note has been taken by the Ministry of Corporate Affairs, Government of India. 

VC Sajjanar, the Commisioner of Police of Cyberabad, told Republic TV that the company has been duping in 'three avatars'. "It dupes people by giving motivational speech, and to camouflage its illegal activities, it sells few products." Informing more about the findings of the case, he said: "During the investigation, many big names were sent notices  - like Anil Kapoor, Shahrukh Khan, Boman Irani. The Govt of India is in the process of winding up the company." About the mastermind of the scam- Vijay Eshwaran and Joseph Bismark, the Police Commissioner said that they are outside India and Police is trying to track his movements. 

READ: Parliament passes bill to curb ponzi schemes; protect poor investors

QNet Scam's Modus Operandi as informed by Police

The QNet scam is a case of cheating by a company named Vihaan Direct Selling Pvt. Ltd. Company. The case was cracked down by the sleuths of Cyberabad Police in various parts of Telangana, Andhra Pradesh, Bengaluru and Delhi. Vihaan Direct Selling Pvt. Ltd. formerly known as Gold Quest, Quest Net, is a Hong Kong-based Direct Selling /Multi-level marketing (MLM) company owned by the QI Group. Gold Quest was established in the year 2001 and was registered with ROC Chennai.

The methodology of selling was so-called 'direct selling through personal approach and based on referral system'. But in fact it was running money circulation scheme in the guise of selling products. The company faced complaints from 172 persons in Chennai and more from all over the country. When the litigation and criminal cases were going on, the promoters of this scheme shifted completely to a newly formed private company called Quest Net.

After facing several complaints all over the county including Telangana, a new company called QNet was formed. The company runs many Ponzi schemes and Binary Schemes. It mainly showcases itself as dealing with Products such as Vacation Packages, famous club memberships, etc. as business tactics, but in the guise of selling products they enroll members and commissions will be paid to the members. QNet, the main subsidiary of the QI Group of Companies was founded by Vijay Eshwaran and Joseph Bismark in Hongkong. Trevor Kuna (joined Q Net in 2008) who was Chief Marketing Officer was appointed as CEO of Q Net. Michael Ferreira and Malcolm Desai are the shareholders of Vihaan Direct Selling Pvt. Ltd. Further QNet has appointed Vihaan Direct Selling Pvt. Ltd. as its franchisee. Dilipraj Pokkella and Md.Imthiyaaz were made directors of this franchise.

HC asks for case to be filed against NCP's Ajit Pawar in bank scam

Arrests, Search and Seizure:

  • Informing that so far about 70 persons have been arrested in about 38 cases which were registered against Vihaan Direct Selling Pvt. Ltd., Cyberabad Commissionerate also said that several cases were also lodged against Vihaan Direct Selling Pvt. Ltd. (Q Net) and its promoters in different states in India.  
  • The Police Commissioner stated in the press note that the Godown of Vihaan direct selling Pvt. Ltd. at Bangalore and the office of Transview Enterpriseswere seized. An amount of Rs. 2.7 crores was freezed in the Bank account of Vihaan Direct Selling Pvt. Ltd.
  • During the course of investigation, notices were served to celebrities - Anil Kapoor, Shahrukh Khan, Boman Irani, Jackie Shroff, Vivek Oberoi, Pooja Hegde and Allu Sirish for participating in company’s programmes. Anil Kapoor, Shahruk khan and Boman Irani responded to the notices through their advocates and reply is awaited from other celebrities. The response of the three celebrities also is being studied. Notices were also given to top 500 promoters of the scheme and replies are yet to be received from them. 
  • The Police press note also mentioned that based on the complaints received against Vihaan Direct Selling Pvt. Ltd. (QNet), the Ministry of Corporate Affairs, Govt. of India has ordered an inspection under 206 (5) of the Companies Act, 2013. The ROC - Hyderabad (South East Region) conducted an enquiry on the company and submitted a report to the Ministry of Corporate Affairs. Further, the Ministry of Corporate Affairs has also issued LOCs against 12 persons associated with the company. They are: 1. Guhan Ramachandran, 2. M.N. Gunasheela, 3. Subha Thulasiram, 4. Vanka Srinivasa Rao, 5. Balaji Magaral Veeravalli, 6. Premdas Ramunni Kurup, 7. Kantha Vijaya Sarathi, 10. Muhammad Imthiaaz, 11. Molckam Nozer Desai and 12. Michkel Joseph Ferreira.

Massive crackdown by Hyderabad Police in QNet scam: 57 arrests in 14 cases, raids across four states. Details here

Cyberabad Police Investigation:

The Inspection Team tried to reach the directors but the letters sent to director Dilipraj Pukkella were returned with the content that “left without instructions” and in respect of another Muhammed Imthiaaz it was received back as “left without instructions return to sender”. Recently, Adapa Arvind a former software professional in Accenture, who was associated with QNet, committed suicide due to loss and cheating by the QNet Company in P.S. Madhapur limits. It has also come to notice that two other persons, who were associated with QNet, one from Chennai and other from Maharashtra have lost their life. Details of the cases are being ascertained. Requesting to Public, the press note by Police said: "It is informed to the public that the Ministry of Corporate Affairs (MCA) has initiated winding up proceedings against Vihaan Direct Selling Private Limited company which is a franchise of QNet Company and runs the Direct Selling/Multi Level Marketing Schemes in India. Public are hereby requested not to join or enrol members into the QNet Schemes and also not to promote its illegal scheme by remitting any money to it or its sub franchise or its members or upliners of the scheme. If remitted they will be doing it at their own risk."

Former Karnataka Minister Janardhan Reddy to be interrogated for alleged links with ponzi scam king pin

By 2030, 40% Indian will not have access to drinking water