The curious case of QNet, the Hong Kong-based controversial multi-level marketing (MLM) operator has now reached the Supreme Court. However, some of the accused or agents of QNet like Suresh Thimiri, who was the chief executive of the MLM company in India, appear to be misguiding the apex court. According to Thimiri’s bail application, which was reviewed by Moneylife, shows that he had told the SC that he was never connected with QNet or Vihaan Direct Selling India Pvt Ltd, the authorised franchisee of the MLM operator. He had made the same claim, at the Bombay High Court
and the Sessions Court, which had dismissed it.
In his special leave petition before the Supreme Court, Thimiri again claimed that "... (he) has no role to play in so far as management, control or administration of Vihaan is concerned. The Petitioner (Thimiri) is concerned with another private limited company called Transview, which supplies products to Vihaan."
Thimiri had filed the SLP before the apex court seeking anticipatory bail. Thimiri, in his SLP, stated that he was not responsible for administering Vihaan in any manner whatsover and he was merely a director of product supplier company. However, documents seen by Moneylife show that Thimiri was not only deeply involved in the affairs of Vihaan, but as CEO of QNet, also gave guidance on remuneration for directors of Vihaan.
Earlier, the SFIO, in its report on the MLM company, stated, “During the above litigation the GoldQuest had stated in its affidavit before the Court that it will not indulge in MLM business along with other facts. The business of scheme of pyramidal functioning of sales and commission payments was then shifted completely to a newly formed Private Company i.e. QuestNet Enterprises India Pvt Ltd, at the same address and by same promoters in March 2005.”
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 Thimiri's company Transview. This made the EOW to freeze Transview's bank accounts in ING Vyasa Bank at Bengaluru.
Even the Directorate of Revenue Intelligence (DRI) had caught QNet for falsifying documents and data while importing products. Documents available with us show how, when cornered by an investigation agency or tax authorities, QNet and all its group companies and associates go for settlement, even accepting the 'guilt' and pay up a huge amount. They used the same technique to get away from strict action in the Supreme Court as well as in a duty evasion case caught by the DRI.
Pushpam Appalanaidu, the then MD of Questnet Enterprises, in her submission had told the DRI that since 2005 she was on the board of directors of Qi Ltd, Hong Kong. Qi Ltd is a the holding company and the different subsidiaries of Qi are Qi Comm (based in London), Questnet (based in Hong Kong), Quex Couriers Sdn Bhd (based in Malaysia), Questnet Vacation Resorts (based in Thailand) and some other local companies based in Malaysia. She also told the DRI that Amit Chitale, Suresh Thimiri, MV Balaji and Laxmikant Venkatesan were staff of Questnet Enterprises based at Chennai and MS (Manjunath) Hegde was finance manager employed by the company at their Bangalore office. (Read: QNet 'settles’ violations and misreporting when caught to keep the scam running
The reports of DRI, SFIO, and other investigating agencies as well as orders passed by various courts are available in public domain. And yet, one wonders, why would Thimiri and others continue to misguide the apex court by denying their relations or association with QNet.
Thimiri has also deleted his association with QNet or any of its group company from his profile page on LinkedIn
. At present, Thimiri's profile on LinkedIn shows him as chief executive of Fortune Innovative Solutions Pvt Ltd. It also mentions him as associated with Fortune Innovative since past 10 years. Thimiri have also deleted name of Transview from his profile page. However, his association is reflected on LinkedIn's suggestion about viewing other people similar to Thimiri's profile. And, hold your breath.... it features names of known QNet associates like Sachin Gupta, Srinivasa Rao, Vihaan's MD & CEO and last but not least, Vijay Eswaran, the group MD and CEO of QI Ltd, the parent of QNet and other similar companies!
Earlier, on 6 May 2016, Justice Mridula Bhatkar of the Bombay High Court, while rejecting anticipatory bail applications of five accused in the multi-crore QNet scam, had observed that "the deceit and fraud is camouflaged under the name of e-marketing and business". 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. (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
Even his visiting card at that time, shows him as CEO of QNet with office in Bengaluru and an email ID of [email protected]
In the same capacity as CEO of QNet he was seen hobnobbing with India's tennis stars at Bangalore.
As Moneylife reported
, 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."
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, Thimiri had said, "The applicant (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 Vihaan Direct Selling India Pvt Ltd."
However, the Bombay HC rejected his application.
Earlier in 2014, the EOW, while opposing bail applications of seven in the QNet scam told the Sessions Court how these accused tried to mislead the Court by submitting fake documents. The EOW had said QNet team leaders, including former world billiards champion Michael Ferriera, Srinavas Rao Vanka, Magarlal Viravali Balaji, Malcolm Nozer Desai, Navjyot Mahesh Das, Chinar Surendra Shinde and Mereilla Kamal Dutta have misled the Court by submitting a fake document while seeking bail. The Police Sub-Inspector (PSI), under whose name the document was submitted, has, in an affidavit, denied having prepared it, the EOW told the Court at that time. (Read: QNet: Ferriera, six others misled court by submitting 'fake' document, says EOW
Coming back to Thimiri’s submission in the Supreme Court, this may appear strange for those who do not have much knowledge of a typical MLM company and its operations. Most MLM companies tell distributors or IRs not to make claims for the products except for those found in company literature. (That way the company can deny responsibility for what distributors do.) However, many companies, including QNet and Amway hold sales meetings at which people are encouraged to tell their story to the others in attendance.
Another modus operandi that is used by the top guns of MLMs is either they deny any association with the company and claim that they themselves are victims of this fraud! Reportedly, few years back police registered a complaint against a female IR (who has now become diamond in QNet) for fraud and cheating. The lady walked away from the case by claiming that she herself was a victim of this fraud. One wonders, why then the lady did not file similar complaint against the company? But this is how these MLMers operate.
In case you are still wondering why Thimiri is not filing a complaint against QNet for using his name as CEO or against Vihaan for dragging him in this matter, here is an eye-opener from the Hong Kong High Court
. Hong Kong-based Kurt George Rocco Rinck, who was one of the founder-director of QI group the parent of QNet, GoldQuest and QuestNet had filed the case. Although his case was dismissed on ground that he had signed a trust agreement and thus was liable to pay money to QuestNet, here is what Justice John Saunders had stated…
2. The particular business run by QuestNet made it necessary for various of QuestNet’s directors to establish in their personal names, to be used as what were described as “buffer accounts”, bank accounts in which funds were held, to be available to QuestNet, to avoid potential problems which may arise should QuestNet’s own bank accounts be frozen.
3. In order to establish one of these buffer accounts, on 18 November 2003, Mr Rinck made a declaration of trust in favour of QuestNet in which he declared that he held all moneys in certain accounts with Citibank in Hong Kong, namely accounts numbered 12330345, 12330353, 82346968, 19356439, 39052036 and 29342899, (the Citibank accounts), which accounts were in his personal name, and that he held:
“all money which may be accrued to or deposited into the aforesaid account from time to time on trust for the absolute benefit of (QuestNet) until such time as those money are withdrawn, transfer or in whatever way he taken out from the aforesaid account according to the instruction of (QuestNet).” (sic)
4. By a subsequent similar declaration of trust, dated 13 December 2005, Mr Rinck reiterated the declaration of trust that he had made in relation to the Citibank accounts, and further declared that he held all money in account number 800777 (under Identification #800777 SAWTSCHENKO) with Dominick Co Bank in Zurich, Switzerland upon trust for the absolute benefit of QuestNet. In these proceedings, the funds in the various accounts, as at 30 June 2006, have been referred to as the Trust Funds.
5. A dispute arose between Mr Rinck and QuestNet around late June or early July 2006, as a result of which QuestNet took steps to remove Mr Rinck from his positions as an employee and director of the company. Mr Rinck disputes that those steps have been effective.
Earlier in February 2014, the Enforcement Directorate (ED), the agency responsible for enforcing economic laws and fighting economic crime in India, registered a case in the Rs425 crore QNet scam for money laundering.
The ED has named QNet Ltd from Hong Kong, its official franchisee Vihaan Direct Selling Pvt Ltd, Vijay Eswaran, the founder of QI group and three other independent representatives (IRs) of QNet from Mumbai.