QNet, the controversial multi-level marketing (MLM) scheme, and its franchisee Vihaan Direct Selling (India) Pvt Ltd, both of which often try to hide behind the 'direct selling or product company' tag have failed to make an entry into the list of direct selling entities in India.
The list has names like Amway India Enterprises Pvt Ltd, K-Link Healthcare (India) Pvt Ltd, and eBiz.com Pvt Ltd against whom there are some cases registered or probe is going on. For Amway, the list states one case is under investigation by the Directorate of Enforcement (ED) under the provisions of the Prevention of Money Laundering Act (PMLA), 2002.
"Several criminal cases against Amway India Enterprises Pvt Ltd and its functionaries are pending or under investigation in the states of Andhra Pradesh, Telangana and Kerala. These are only those cases which have been brought to the notice of department of consumer affairs," the portal says.
However, despite trying very hard to establish itself as direct selling or direct product selling company in India, QNet and its franchisee Vihaan have failed to make a cut in the list issued by the department of consumer affairs.
As reported by Moneylife in December 2016, while a few powerful members were not allowing QNet’s entry into the Indian Direct Selling Association (IDSA), its franchisee Vihaan’s application too was rejected by other association, Federation of Direct Selling Association (FDSA).
While rejecting Vihaan's membership application, the FDSA had said, "The Federation is repeatedly being approached by Economic Offences Wing (EOW) of Mumbai Police seeking various information regarding the company (Vihaan). The (Scrutiny) Committee feels it has collected the information about the pending court cases and is serious on the sub-judice status of the company. The Committee feels that the sub-judice status of the company (Vihaan) will jeopardise the faith of the government/ industry bodies in the Federation, hence recommends that the company need to come out clean before being considered by the Federation." (Read: QNet: FDSA too rejects Vihaan's membership application
QNet, the Hong Kong-based controversial MLM scheme has been facing backlash from several other countries as well. Earlier this year, QNet had to cancel its high-profile, flagship annual even called V-Con that that was scheduled to be held in Dubai between 8th to 12th September.
In an email response, Zaheer K Merchant, director for corporate affairs at QNet, told Moneylife that, “As stated in the Facebook post, we had to make a decision to postpone the event due to circumstances beyond our control. You will note that several other large events were cancelled or rescheduled in Dubai in recent months, including the Dubai International Film Festival. We have no further comment here.”
QNet did not mention what these 'circumstances’ were, for cancelling its prestigious event. According to sources, the V-UAE 2018 was cancelled after Saudi Arabia declared QNet as haram and activities of the MLM company as ‘misleading activity’. On 1 September 2018, the ministry of commerce and investment (MCI) in Saudi Arabia issued a warning against QNet saying that its activities are prohibited in the country.
On 1 September 2018, the Ministry of Commerce & Investment in Saudi Arabia had issued a warning against QNet (https://mci.gov.sa/en/MediaCenter/News/Pages/01-09-18-01.aspx) saying that its activities are prohibited in the country.
Later in mid-September, the MCI from Saudi Arabia raided meeting places of QNet in that country. “QNet marketing activity aims to mislead and deceive dealers and clients with quick profit. Therefore, they try to raise money illegally by claiming that they are investing such money. This kind of activity is considered illegal because it depends on deceiving, cheating, fraud and manipulation,” the Ministry had said in a release. (Read: QNet: Saudi Arabia Raids Meeting Places of the Banned MLM
Back home, there are several court cases and probe going on against QNet, its franchisee Vihaan and many people associated with the MLM scheme. In fact, two year ago, the Bombay High Court, in its judgement has observed "the deceit and fraud is camouflaged under the name of e-marketing and business".
While rejecting anticipatory bail applications of five accused in the multi-crore QNet scam, Justice Mridula Bhatkar, in a hard-hitting order on 6 May 2016 had 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."
"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," Justice Bhatkar had remarked. (Read: 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
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 had contended that the illegal money circulation scheme is being conducted in India by changing names from GoldQuest to QuestNet to the current QNet.