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Moneylife » Economy & Nation » MLM / Chain Money » QNet: Mumbai police register fraud case against the MLM

QNet: Mumbai police register fraud case against the MLM

Moneylife Digital Team | 17/08/2013 01:10 PM | 

QNet, Vijay Eswaran, Qnet FIR, GoldQuest, QuestNet, QNet, QI Ltd, QI, ChiPendant,

EoW from Mumbai registered an FIR against QNet, the MLM company, for allegedly duping thousands by selling them plastic and glass products as miraculous objects

QNet, the controversial Hong Kong-based multi-level marketing (MLM) operator with multiple names (GoldQuest, QuestNet, QNet, QI Ltd and QI group are the better-known names) has finally come under the radar of Mumbai police.


According to a report in Times of India, the economic offenses wing (EoW) of Mumbai police has registered against QNet, for allegedly duping thousands of investors by selling them plastic and glass products terming them miraculous objects for treating severe diseases like Cancer.


"The firm (QNet) posed as a marketing firm which would sell bio-disc, watches, chiPendants, gold coins, herbal products, e-education packages and holiday packages. They even claimed that by using the bio disc one can cure cancer and brain related diseases," the report said quoting a police officer.


UPDATE: According to a report from Times of India, the EoW has arrested Bandra-based Manjunath Hegde for cheating in the QNet case. He was reminded to police custody till 22nd August. "Hegde, who is an advertiser by profession, was arrested from his Bandra residence. We searched his house and seized computer hard disc and several incriminating documents, which will be produced in the court. There are some payment/commission receipts among the documents," the report said quoting an investigator.


The complainant, Gurupreet Singh Anand, 40, a computer consultant from Lokhandawala, Andheri stated that his wife was duped for Rs30,000 by some people who had introduced themselves as the independent representatives (IRs) of QNet. Anand told the police, "They (IRs) had said that one of the bio-products my wife bought could be used to treat my 12-year-old son's brain related diseases".


The first information report (FIR) names five accused, including QNet's Hong Kong-based founder Dato Vijay Eswaran, a Malaysian by birth and an Indian by ethnicity, who is photographed hobnobbing with the Prince of Saudi Arabia, in order to enhance its credibility in the Gulf.

(Vijay Eswaran (circled), the founder of QNet along with Dev Wadhwani (in blue shirt), VP of QNet Source:


"One of the wanted accused Vijay Eswaran, had earlier floated two firms; Gold Quest and Quest Net Enterprises, in India and duped thousands of people. These two firms were also popular in Egypt, Afghanistan and Malaysia. We are trying to zero in on Eswaran and will soon arrest him," the newspaper said quoting the officer.


While QuestNet and GoldQuest, which mainly sold numismatic gold coins (they claimed they were limited edition coins that whose value would increase over time) in 2009 were forced to shut shop in India, their new avatar QNet offers a broader range of lifestyle ‘enhancing’ products (holiday packages, diamond watches, bio-discs, Chi-Pendants and herbal products for anything between Rs30,000 to Rs7 lakh), which promise fabulously high returns so long as new distributors are enrolled rapidly. Its product brochure says, “With 8 ways to earn and up to 50% of the sales paid out in commissions, QNET offers the most dynamic and innovative compensation plan in the direct selling profession.”


(Suresh Thimiri, MD & CEO, QNet India (circled) with Indian Tennis stars at the Davis Cup Source:


The last time around, QNet was being evangelised by former World Billiards champion Michael Ferriera, as well as some former international cricketers. QNet even sponsored the Indian tennis team for Davis Cup. This time, it is being hard-sold by senior corporate executives, including heads of multinational companies, who have been forced to quit in the 40s and 50s, having fallen off the career ladder. Moneylife has received emails from several worried readers asking us to bring the “QNet scam” to the attention of regulators before it dupes their friends and relatives already ensnared by the hard sell.

(Muttiah Muralitharan, the greatest Test match bowler from Sri Lanka at QNet event. During 2005, the GoldQuest scheme spread across Sri Lanka, marketing gold coins for double their worth. This forced the country to frame new law to ban MLMs, especially GoldQuest. Image Source: )


Manoj Arora (name changed), a chartered accountant and management consultant tells us how he decided to string along a QNet ‘operative’ to understand its modus operandi which promises to make you a millionaire in two or three years.


He was scandalized at what he discovered and says, “QNet is just not about Amway-esque MLM but a Stockguru-type pyramid scheme. The premise is to get more and more people to invest Rs1 lakh to Rs6 lakh in an 'e-commerce' venture. They make you owners of QI group by selling three shares for every Rs1 lakh. How does that generate returns? The victims who are enrolled into the scheme, in turn hunt for newer victims to buy into the Ponzi. They are entitled to get 14% of share capital they or their victims raise. The scam is proliferating through social media like Linked-in to find newer targets. This reader had stored names and screenshots of people canvassing QNet from their profiles on Linked-in.


Well, the company had a chequered past. In 2008-09 it was making waves like it is today. At that time, it flaunted powerful political connections (at that time a GoldQuest executive, K Preetha had said that Nalini Chidambaram was a legal advisor. This was after we pointed out that the connection was highlighted at its meetings to recruit/ensnare new agents). However, QuestNet virtually folded-up after the Chennai police arrested several employees and the business was in complete disarray.


QNet claims that a Diamond Star can earn up to Rs27,73,800 (Rs27.7 lakh) per week while the same for a Platinum Star would be Rs22,39,050 (Rs22.4 lakh) a week. The money earned by a Diamond Star in QNet is almost the same that Mukesh Ambani of Reliance Industries (RIL), India's richest man as per the Forbes list, earns every week as salary (Mukesh Ambani forgoes Rs23.82 crore from his pay package ). We all have heard about Mr Ambani and his wealth. However, nobody knows how many Diamond or Platinum Stars are there in QNet's MLM network. If you know, please share it.


There are several people who are now demanding their money back from QNet. Few of them even posted such messages on QNet India's page on Facebook. On 20th May, Suryakant Kaushik, posted: "Even after a month of filing for the cancellation, I am still waiting for the refund. Adding to this, I have dialled the customer care numbers-+91 99 0006 3901 & +91 96 8668 9974.10-15 times a day but nobody responded. I am very frustrated by the way my case is handled. Never thought that the refund process could take more than a month and still nothing can be said about the status."


CA Abhishek Sahay wrote this message: "hi CHIEF Pathman...on 1st AUG 2013 I bought QVI Club membership from QNET for Rs2.61 Lakh and on 2nd August, I requested to cancel it and refund full amount, QNET official assured initially to refund full amount but now they are not responding my call or email. I request you to please look into the matter and get my full refund as soon as possible. My IRship is IN*****9 and email is a******; Please do not let me feel cheated by your Company QNET. Please do not check my calmness. Refund my money ASAP."


Bala Kavassery posted this message: "I have been requesting since last 5 days with QNet support team India for cancellation of my IR IN*****4 and refund of vacation package ordered earlier. No support or response forthcoming till date. Once again request for my IR cancellation and refund of vacation package amount."


As Moneylife wrote earlier, Ashu Dutt, a well-known television journalist shared how he and his family became a victim of QNet. He said, "QI/ QNet/ QuestNet/ GoldQuest/ Faith Network is not just a fraud, but they lure women to break away from their families and then go after the family money. My own wife fell into this trap. Once this was done, they got her to put money from our house and relatives. Once they trap the women, they go after their wealth. My wife has now gone on to take over our assets by changing directors and doing all kinds of illegal corporate stuff guided by QI kingpins. This is my story. I can tell you that there are hundreds of Indian families that have been ruined by these people. In Mumbai, they use hypnotism and cult-like practices (wearing white clothes with blue pendants)."


In India, QNet’s MLM operations were controlled by QuestNet Enterprises (India) Pvt Ltd, a company registered at Chennai till 13 April 2012. From next day, it shifted all its registered agents, database and business to Vihaan Direct Selling Pvt Ltd, company registered in Bengaluru.


Moneylife has done extensive work on all MLMs and come to the conclusion that all of them fall foul of the Prize Chits and Money Circulation Schemes (Banning) Act, 1978.  We have also made representations to the Prime Minister’s office to ban MLMs altogether or allow them to operate under a clear regulatory framework under a designated regulator.


Today, while tens of thousands MLMs and Ponzis are cheating people no ministry or regulator is in charge. The ministry of corporate affairs (MCA) does not even require these companies to be incorporated in India. This ludicrous situation persists at a time when there is such heated debate about legitimate foreign direct investment in retail and insurance.


You may also want to read...

QNet, the MLM has resurfaced in India; will people be duped again?


QNet, the MLM company, has no answers to Moneylife’s simple questions


QNet: The “money game” played by MLMs to lure the gullible


Forbes magazine's strange activism on behalf of the shady MLM QNet


MMM India, QNet ‘cult’ growing. Why government is dragging its feet in tackling this MLM menace?


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jitu moni

jitu moni 1 day ago
MUMBAI: Investors who lost their money in major scams and multi-level marketing's cheating cases can heave a sigh of relief now. The state government has appointed 49 new competent authorities (CAs) to take decision in as many as 101 cases regisered under the strinent law, The Maharashtra Protection of Interest of Depositors (MPID) Act. This will help to dispose of as much as Rs 10,000 crore of investors that is stuck in over a hundred cheating cases' legal battle.

Earlier, the city economic offences wing (EOW) had only two competent authorities. "CAs will proceed with the procedure of disposal of properties and realisation of money for repayment to the investors. It will expedite the process of recovery and will help the victims who have been cheated to get their money back," said Dhananajay Kamalamakr, joint commissioner of police and EOW chief.

The big cases where these CAs will focus first include the cheating cases incluidng National Spot Exchange Limited (NSEL), QNet, SpeakAsia, fixed deposit scam led by Sheesha lounge owner Mohammed Fasih and the Mumbai District Cooperative Bank. SpeakAsia alone has over 24 lakh investors. The money lost in this case is over Rs 2,276 crore while investors' over Rs 6,000 crore is stuck in the NSEL case.
TOI had on October 11, 2015 reported about that as many as 62 cases under the MPID act were pending in a city court due to non-appointment of a competent authority. While seized properties of the accused in all the above cases await disbursement among the victims, the city police has sent a proposal to the state for several amendments including the appointment of CA for a speedy return of public money, said police sources. More than Rs 10,000 crore public money is stuck in MPID cases in the city alone, they said.

"Earlier, non-appointment of competent authority defeated the objective of the enactment of the MPID Act," said an EOW officer. While an investigating officer probes the criminal part of a case, the civil aspects such as the attachment of properties, sale-realization of properties, and disbursement of sale proceeds to the victims are exclusively in the domain of the competent authority who is a revenue officer of deputy collector rank.

"It is observed that competent authority has been appointed in 23 cases in the city MPID cases earlier, notification of the properties in the official gazette is yet to be published. Hence, it would be better to have CAs with independent portfolio for MPID cases," said a senior IPS officer.

Major cases where the appointment of competent authority will give relief to investors:

· NSEL Rs 6,000 crore
· SpeakAsia Rs 2,276 crore
· QNet Rs 425 crore
· FD scam Rs 325 crore
· Mumbai District Cooperative Bank Rs 119 crore

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jitu moni

jitu moni 2 months ago

In a setback to voiceover artist Tarun Ratnani, the Bombay high court turned down his application seeking waiving of trial court order asking him to furnish a bank guarantee of Rs 35 lakh failing which the investigating officer would sell his BMW car and deposit the amount with bank registry as security in the Rs 800 crore QNet scam.

The prosecution’s case is that Ratnani is one of the main accused in the scam and during the course of investigation, it was revealed to the investigation agency that the appellant has purchased the said vehicle by using the proceeds from the aforesaid crime.

Considering this, the police had seized the BMW that belonged to Ratnani; however on his appeal, the special MPID judge issued a direction to release the said vehicle subject to the appellant furnishing bank guarantee of Rs 35 lakh and indemnity bond of the same amount within a month, failing which the investigating officer was directed to sell the said vehicle and to deposit the sale proceeds in the name of registrar of sessions court for an initial period of five years pending the trial.

Ratnani, through his lawyer, had requested the court to give back his car on indemnity bond without a bank guarantee of Rs 35 lakh. He had contended that he had sold his old car and used Rs 4 lakh from the profits earned from QNet investments and the remaining was paid through loans so it cannot be said that the car was bought from money earned from QNet and hence the car should be handed over to him on bond. He also assured the court that if investigating agency comes to the conclusion that the car was bought entirely from the proceeds of the alleged crime then he would reimburse that amount.

However, the division bench of acting chief Justice V. K. Tahilramani and Justice A.S. Gadkari rejected his application and held that the trial court has not committed any mistake in passing the impugned order.

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jitu moni

jitu moni 5 months ago

VIJAYAWADA: Yet another multi-level marketing (MLM) company Vihaan Direct Selling Ltd was sealed by police and its representatives were paraded before mediapersons here on Tuesday. Police will soon serve a notice on its promoters -- Vasudeva Reddy and Ch Gangadhar - who are currently in Dubai and alert the Interpol to help nab the duo.

Addressing a press conference here on Tuesday, commissioner of police A B Venkateswara Rao said that 134 people in the city have fallen prey to the company. "Vihaan Direct collected Rs 1.16 crore and deposited Rs 65 lakh in the account of Vihaan Direct Selling Ltd, which is based in Mumbai. Another Rs 10 lakh was deposited in the account of VR 1 Training Centre, which is based in Bangalore. Rest of the funds have been misappropriated," he said.

Acting on a complaint from a depositor Prathipathi Lakshmi Ganesh, Krishna Lanka police led by circle inspector S V V S Murthy arrested four representatives of the firm- Gourang Desai, Y Babul Reddy, D Nagaraju and Ch Manikanta -- on June 22 and recovered Rs 15 lakh in cash and four mobile phones.

It was on January 5 this year Mumbai-based Vasudeva Reddy, a notorious MLM agent, opened Vihaan Direct as a franchise of Hong Kong-based Q-Net near Prasanthi Hospital in Labbipet. He also ran a training centre called VR 1. City-lad Desai, who met Vasudeva in Mumbai, was nominated as in-charge of the training centre. Gangadhar, a close aide of Vasudava, was nominated to run the direct selling firm.

Gangadhar recruited Babul, Nagaraju and Manikanta as independent representatives (IRs) to carry out the fraudulent MLM operations. Their modus operandi was typical of a binary tree structure- each IR has to recruit more members. IRs will receive commission based on the number of referrals and sales volume of other IRs in their team.

The police commissioner said that Vijay Eswaran, who runs Q-Net, is the brain behind the MLM firms. "From 2002-08, he ran a firm in Chennai that swindled Rs 1,100 crore. Between 2010-14, he ran another MLM firm with Vasudeva Reddy, which swindled Rs 425 crore from depositors," he added.

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jitu moni

jitu moni 5 months ago

QNET multi-level marketing scam busted in Vijayawada - Tv9


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jitu moni

jitu moni 5 months ago
Four persons have been held today for their alleged involvement in the multi-level marketing 'Qnet' case, police said.

The four persons, identified as V Bal Reddy, Gautam Desai, Dasari Nagaraju and Cheemakurti Manikanta, were arrested today and Rs 15 lakh, deposited in different bank accounts, were seized from them, district Police Commissioner A

B Venkateswara Rao said.

The accused were nabbed by Economic Offences wing of the Commissionarate and the key person involved in the alleged fraud, Gangadhar from Vijayawada, is absconding and is currently said to be in Dubai, the senior officer said.

The five persons were associated with multi-level international marketing firm Qnet, a company founded by one Vijay Eswaran, a Malaysian citizen based in Hong Kong, in 1998, where the company agents extracted huge money from people by offering them lucrative incentives, he said.

The company also operated in India with other names like 'Qen' and 'Quest, police said.

Eswaran had appointed one Vihan Direct Selling, owned by Gangadhar, as the sole selling company in India, where the firm had assigned some agents to recruit salesmen under the direct selling system.

According to police, the agents had appointed 134 first level salesmen by collecting Rs 1,16,55,000 and another 13,400 second level salesmen were joined by the 134 sales persons.

In the meantime, one of the salesmen suspected company's activities and lodged a complaint with the police and the four accused were arrested after investigations.

Rao said if necessary, a red corner notice will be issued against Gangadhar.

He said Qnet is facing many charges in the country and some of the cases against the company are pending in courts.

A decade back, the company was involved in a Rs 11 crore case of alleged fraud in Chennai. It has also been facing some cases in Mumbai, the officer said.

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