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Moneylife » Life » Public Interest » QNet, the MLM has resurfaced in India; will people be duped again?

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

Sucheta Dalal and Yogesh Sapkale | 15/11/2012 05:47 PM | 

QuestNet and GoldQuest, which all but closed down in 2009, have emerged bigger and stronger as QNet.  But the hype and hard-sell by this MLM company to ensnare people into enrolling distributors and hawking lifestyle products such as watches, gold coins, bio-discs, herbal products and travel packages is worrying. Will it also go the SpeakAsia, Stockguru and NMart way while regulators do nothing?

 
QuestNet and GoldQuest, multi-level marketing (MLM) companies that had shut shop in 2009 following police action are back with a bigger bang. They now calls themselves QNet and is thriving in an environment where tens of thousands of Ponzis and MLM companies are able to lure people into believing that they have the formula to instant riches and a high growth career. 
 
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.”
 
 
Like SpeakAsia, QNet is also registered in Singapore and has been banned in many countries, including Iran. It has a 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. 
 
The last time around, QNet was being evangelised by former World Billiards champ Michael Ferriera, as well as some former national cricketers. 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.
 
One reader says, “QNet dealers are now targeting call centre employees, IT professionals and housewives on the promise of helping them earn extra income.” “QNet,” he says, “has small office, which it refers to as a “Grooming Centre” at Bandra in Mumbai. Its dealers and agents, however, rent out conference facilities for their rousing hard-sell which, like the Amway meetings, usually happens on a Sunday morning. To become member, you have to buy products—exquisite watches, holiday package, Chi-Pendants, gold and diamond jewellery—which are in the range of Rs1 lakh to Rs2.5 lakh and then to start earning commission; you have to make six other people to buy products”. But this is the simple option. The ‘packages’ go up to Rs6 lakh or more too. Also, there are apparently different schemes and packages being sold to different investors, rather than one clear product or service. 
 
For instance, Anil Mehta (name changed) a certified financial planner has this to say. “QNet is projecting that it can create over lakh billionaires through its Ponzi scheme. All you have to do is to invest once—say Rs5lakh and you will get back Rs 5lakh every week for the rest of your life. I know you will laugh, but this is exactly what they are projecting”. He says, since they claim to be a global company, they have managed to get bank managers, software professionals and insurance agents to get involved and evangelise this scheme. 
 
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. 
 
Amrit (name changed), yet another reader wrote to say, “I was very recently approached by an ex-colleague with one wonderful scheme by QNet and he explained the products and plans of the company. I signed up for it on the basis of my trust in this friend. However, after joining I observed that the company is promoting its money-making plan by targeting the near and dear ones of those who has enrolled. I am now a suspicious about the activities of QNet and its functioning and skeptical about the manner in which they approach people. Can you tell me more about QNet?”
 
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 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 completely disarray. 
 
At that time, QNet’s Singapore-based Director of Corporate Affairs, Zaheer K Merchant had attempted to convince us that the business model was fair and in line with the activities of other direct marketing and MLM companies such as Amway, Tupperware and other multinationals which were members of the Indian Direct Selling Association. He also tried to explain the problems at Chennai.
 
Interestingly, QNet’s response was to organise a junket for journalists to Hong Kong to show that the company was not running a ‘scam’. This writer also received an invite, which we DID NOT accept. J Mayer, the Managing Director of QI Group had then written to say, “I believe that you are familiar with the names QuestNet and GoldQuest which have been in the media spotlight in Tamil Nadu and other areas of India for about a year or so.  Unfortunately, I am aware that the names QuestNet and GoldQuest do not have a positive image in the minds of either the media or the general public at this present moment.
 
Due to the legal challenges that both the companies have been facing, in India for over a year now it has unfortunately led to both companies being forced to halt their operations and temporarily close down their offices. However, the companies are by no means non-existent. Thus the MD of QuestNet India, Ms Pushpam Appalanaidu has not been in any position to make media statements or invite the media to an open forum to answer questions about the two entities.
 
As we continue to defend our case in the court of law to prove our legitimacy, we would like to take the opportunity to show you that QuestNet and/or GoldQuest are not a ‘scam’ or a ‘gold coin fraud’ company as it has often been portrayed in the press this past year.
 
QuestNet Ltd, the international company with which QuestNet India is affiliated is headquartered in Hong Kong and through representative and agent offices, has a presence in over 30 countries worldwide. The international company has been in the multi-level marketing business for about 11 years and caters to the needs of over 4 million customers in more than 100 countries worldwide who have taken advantage of the business opportunity provided by QuestNet to be a direct sales professional.
 
In order for us to show you the real face of QuestNet and share with you the story of the company that has changed millions of lives worldwide, we would like to invite you to visit our corporate headquarters in Hong Kong, where you can see for yourself our global infrastructure, meet with our multinational customer support team, go on a tour of our facilities including our warehouse from where thousands of products are shipped worldwide on a daily basis, meet with the senior management of QuestNet International  and learn about the investments the company has made in India with a view of long term commitment to the country”.
 
This time too, we reached out to QNet and Mr Merchant has agreed to answer all out queries. Accordingly, Moneylife has emailed several questions to QNet and we are awaiting answers which will be appended to this report. 
 
Since then, 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 thousand 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. 
 

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474 Comments
gurupreet

gurupreet 4 days ago

Mumbai: The police custody of ex-world billiard champion Michael Ferreira's former daughter-in-law, who was held in connection with the QNET scam, was on Tuesday extended till September 22 with investigators seeking to examine her earnings and investments she made using the illicit money.

Read full story here: http://zeenews.india.com/news/maharashtr...

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gurupreet

gurupreet 4 days ago

The EOW had arrested Susan Chatterjee, former daughter-in-law of Michael Ferreira in the Rs425 crore QNet scam. While Ferreira owns 80% stake in QNet's official franchisee in India, his son, wife and close relatives are also reportedly under the scanner

With the arrest of Susan Nikhil Chatterjee, former wife of Mark Ferreira, the focus of the investigators is now back again on the family of former world billion champion Michael Ferreira. The Economic Offences Wing (EOW) of Mumbai police last week arrested Susan in the Rs425 crore QNet scam.

Read the full story here...and please add your comments...

http://www.moneylife.in/article/qnet-mic...

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Arunraj Shanmugam

Arunraj Shanmugam 6 days ago

New Qnet office had been opened in PTC chennai. My friend asking me to join. They charging 1lakh for hard way and 2.5lakhs for smart way.Is it legal or not? How to check its legality? They are forcing me to join, do I need to register complaint against them?

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jitu moni

jitu moni 2 weeks ago

MUI Riau: QNET Business Indicated Haram
June 18, 2014 by the Indo Howmoney

QNET_logo_indonesia Of Riau, Chairman of the Fatwa Commission of the Indonesian Ulema Council (MUI) in Riau Province Ustadz Abdurrahman present the results of studies related institutions will report QNET business community on Tuesday (06.17.14). MUI Riau concluded, that QNET MLM business founded by Malaysian businessman Vijay Eswaran, there MLM qualified as defined MUI halal center.

"We received complaints from the public related QNET MLM and after assessment, we conclude that QNET MLM strongly indicated forbidden," he told riauterkinicom.

Presented Ustadz Abdurrahman, from contract documents or statements QNET MLM participants were studied and the products are used as evidence, developed QNET MLM system containing elements of fraud, is potentially causing loss of one of the parties and obscurity.

For example, each participant must purchase a product in the form of Chakra, a round clear glass plates by hand or Chi Pendant, a round slab logal for long Rp100 coins shaped pendant, worth Rp 8 million. Goods that, according to the QNET, expensive as it is a matter of health therapy.

During this QNET promotes itself as an online business. But in fact the ministry of the QNET greetings and the bucket is very slow, far from being a good online business. "The payment must be in cash, but the new goods are handed over to the buyer many months later. In fact, there are up to five months to get the new, "he said.

See also: What is QNET it?

In addition to pay in cash, but did not immediately get the items purchased, the price Chakra or Chi Pendant is believed to be very expensive compared to the actual value.

"We (masyarakat.red) may be asked to purchase the item (Chakra or Chi Pendant. Red) fifty thousand also may not want to," he said.

Ustadz Abdurrahman Furthermore, in addition to having to pay 8 million for goods that are considered not worth the QNET MLM participants are required to invite six new members to transact with each value of 8 million, the new bonus Rp3.5 million. Departing from non-halalan conclusion QNET MLM system, Ustadz Wahid appealed to the people of Riau, especially Muslims to avoid the business.

Meanwhile, Fery Wibowo, one of the leaders of PT Amoeba international, licensees QNET Indonesia, Riau riauterkini.com when found in one of the alleys in Jalan Bukitbarisan Pekanbaru, mentions that the legal and lawful business.

"We have an official license and also had a halal certificate from NU South Jakarta," he said.

Although not representative of the management company QNET, Fery Wibowo threatened to penalize parties who accused QNET business activities based in Hong Kong, an element of fraud.

"If anyone dared mention QNET is a fraud, I guarantee within a few hours in question would be the status of a suspect," he threatened as it.

Then one year in Banyuwangi

Even so, exactly one year ago, in June 2013, about 200 members of QNET came to the police station and reported the fraud Banyuwangi by PT QNET Indonesia with an indication of the loss of the member reaches 1.6 billion. Rudi is Suprapto, 50, Blokagung villagers, village Karangdoro representing several residents reported the case.

"I can only once a commission of 726 thousand," said Rudi Suprapto KabarBanyuwangi.info quoted as saying. While he argues, the QNET promising a salary of Rp 2.5 million per week. "The amount (bonus) depending on the product to be purchased," he said. Obtaining explanations that every member QNET should purchase products with prices starting at Rp 7 million, USD 9.6 million to $ 10.8 million. He felt cheated because after a year to join in the QNET he did not get any bonus as promised by its leader.

In the promotion, he explained, all of the products that are considered to have the power. "Bio Disc is drenched with water, he was able to cure all diseases pe. If you wear a necklace, she was able to lift heavy loads, "he said.

Not long ago, the police respond to the report and hold Syamsuri and Bambang. Both are QNET MLM leaders in East Java.

http://howmoneyindonesia.com/2014/06/18/...

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gurupreet

gurupreet 2 weeks ago

Today QNET advocates scored a second self goal in court :)

Ever Since my fight started against QNET SCAM I have faced the following lawyers in court by appearing in person:

1. Nitin Pradhan
2. Mahesh Jhetmalani
3. Abad Ponda
4. Haresh Mohan Jagtiani
5. Divya Bahl
6. Rajendra Mokashi
7. Kuldip Patil
8. Sandeep Karnik
9. Sudatta Patil etc…

All these are senior advocates with teams of juniors below them but till date QNET did not get any single favorable order from any court.

The FIGHT enters a “new phase” now….Ganpati Bappa Morya :)

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