A nation-wide probe has been launched to nab the main perpetrators behind the multi-crore rupee fraud, allegedly committed by marketing firm QNet, police said Wednesday. Police were also examining a complaint which cited involvement of several Hindi film actors for promoting the company, a senior police official said. The case pertains to alleged "cheating" by the Vihaan Direct Selling Pvt Ltd Company, a sub-franchise of QI Group in India, marketing under the brand name of QNet, police said.
Reacting to the police action, the Company said it was "disappointed" by the action taken by authorities which are against the spirit of the Direct Selling Guidelines issued by the Telangana State Government. In a release, Vihaan Direct Selling (India) Pvt Ltd said a detailed investigation has been launched to punish the culprits. Police said 60 people were arrested last week for "involvement" in the 'QNet scam' in which lakhs of people across the country were "cheated" of crores of rupees.
They said a sum of Rs 2.7 crore was frozen in the Bank account of Vihaan Direct Selling Pvt Ltd and bank accounts of the accused involved in the cases were also seized. A total of 30 cases were registered against QNet in Cyberabad Police Commissionerate limits here while eight cases are under investigation by the Telangana CID. Cyberabad Police Commissioner V C Sajjanar said they were collecting information from police of different states and also from people who have been cheated across the country. "Our teams have been visiting different places including Mumbai, Pune, Delhi and Bengaluru. This scam is rampant in the IT corridors of Bengaluru and other cities. The prime accused need to be arrested," the Commissioner told PTI. "We are verifying their bank accounts and examining others," he said.
Sajjanar said they have also written to the Ministry of Corporate Affairs and Registrar of Companies seeking information on what kind of permission these firms had taken to run their businesses. Police said following the arrest of 60 people, some members of the Financial Fraud Victims Welfare Association, which has become the voice of victims of QNet, had met the Cyberabad Police Commissioner last week and requested him to book cases against few Hindi film stars and other celebrities for promoting QNetin India, Dubai and Malaysia. QNet has been using these celebrities to promote their illegal money circulation scheme in India, the victims had alleged in their complaint. "We are examining the complaint over alleged involvement of Bollywood stars," Sajjanar said.
According to the Commissioner, Vihaan Direct Selling Pvt Ltd formerly known as Gold Quest, Quest Net, is a Hong Kong-based multi-level marketing company owned by QI Group. The company invokes many 'Ponzi' schemes and Binary Schemes, Product based, Vacation Packages etc, business tactics which are "illegal", he said. Police said their pyramidal structure of so-called direct sales involves enrolment of a common person based on a payment which the promoters dupe as buying of a product and annual registration fees. According to police, such person will be called an Independent Representative (IR).
They receive commissions based on the further enrolments they bring into the scheme. Such enrolment linked payment of commission schemes are banned in India as per 'The Prize Chits and Money Circulation Schemes (Banning) Act, 1978,' police said. QNet has also been accused of using the banned binary pyramid business model for their multi-level marketing (MlM) schemes to entice investors.
According to police, several cases have been registered against QNet and its earlier firms in Tamil Nadu, Karnataka, Andhra Pradesh, Maharashtra, Delhi and Telangana states. Vihaan Direct Selling (India) Pvt Ltd said "The company's grievance redressal cell is headed by a retired high court judge. Hence, police intervention in a matter which is clearly a consumer complaint is puzzling."
"We are further taken aback by the action taken by the authorities and the manner in which over 50 of Qnets Independent Representatives have been taken into custody." The firm said it has taken cognisance of the Police Commissioners statement about the misrepresentation by Qnet independent representatives (IRs) in Hyderabad promising quick money, and making other false claims about the financial returns from the business. "We have launched a detailed internal investigation to ascertain and punish the culprits, and have already suspended several IRs," the release added.
(With inputs from agencies.)