QNet: Hyderabad Police arrests Michael Ferreira & three others; ED questions Boman Irani’s son
Tough times for Michael Ferreira, former world billiard champion and three others arrested in the QNet scam case in Mumbai continue. All four have now been arrested by the Central Crime Station (CCS), a wing of Hyderabad Police in the multi-crore QNet scam case, even while their remand period in Mumbai is not completed. Last week, a special team from Hyderabad Police had submitted an application to a Court in Mumbai seeking custody of Ferreira, Magaral Balaji, Srinivas Vanka and Malcolm Desai. These main accused in the QNet scam were brought to Hyderabad from Mumbai on a prisoner transit warrant. "They have been brought here as part of further investigation and will be interrogated," a senior police officer from the CCS had said.
Meanwhile according to a report from India Today
, the Enforcement Directorate (ED) had questioned Danesh Irani in Mumbai for at least four hours on Tuesday and recorded his statements under the Prevention of Money Laundering Act (PMLA). Danesh is the son of Bollywood actor Boman Irani. But more about it later.
In September 2016, Hyderabad City Police arrested four independent representatives (IRs) of QNet
for cheating about 200 people under the pretext of giving a job and collecting around Rs2 to Rs3 crore. In a release, the Hyderabad Police stated that cracking QNet case, they arrested four accused Sreenath Konda, Prasanna Kumar Reddy, Kanchana Vobbilichetty and Beemarthi Dhan Raj, who hatched plan to grab money from the innocent people on the name of providing job in e-commerce business through their websites, www.qnet.et and www.qnetindia.in.
Earlier this month, Ferreira, and two others surrendered before a Special Court following orders from the Bombay High Court. Last month, the HC had asked five prime accused, including the four, who are now in Hyderabad Police custody, and Suresh Thimiri, director of Transview Enterprises India Pvt Ltd to surrender as per the directions passed by the Supreme Court in the QNet scam case.
Ferreira owns 80% stake in Vihaan Direct Selling (India) Pvt Ltd, which is franchisee of QNet while Desai holds the rest. Magaral Balaji and Vanka are directors of Vihaan. Last month, all the five prime accused had approached the Bombay HC seeking to quash the first information report (FIR) filed by Gurupreet Singh Anand as well as a stay on coercive action against them by the authorities. A division bench headed by Justice Abhay Oka, while refusing to grant any relief, asked the five to surrender before authorities as per directions from the apex court.
Last month, the Supreme Court, while accepting Maharashtra's standing council Nishant Khatneshwarkar's argument that the accused have failed to join the investigation and the charges are serious, had directed the five to surrender within a week.
Earlier in May, the Bombay High Court had also rejected bail plea of these five associates of QNet. While rejecting anticipatory bail applications of five accused the HC had observed that "the deceit and fraud is camouflaged under the name of e-marketing and business". This scheme is undoubtedly a multi-level marketing (MLM) activity and a pyramid structure of such scheme is prepared so that the members are promised to get money on purchase and sale of products, the Court had said.
In a hard-hitting order on 6 May 2016, Justice Mridula Bhatkar of the Bombay HC had said, "The motto of the company (QNet) '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."
"It has very grave and serious impact on the economic status and mental health of the people on a large scale. On considering parameters of section 438 of the Code of Criminal Procedure, I am not inclined to protect the accused. It won't be out of place to mention that such circulation is required to be stopped. It is necessary for the prosecution to take injunctive steps against this business activity, which is prima facie, illegal. Though by stopping this business, a large group of people may get financially affected, however, it will save larger groups of people from becoming prey of this activity," the Bombay HC said.
"I have gone through the plan which is given by QNet to every individual representative (IR)," Justice Bhatkar had said. "I have gone through the statements of many witnesses, who claimed that they have been cheated under the scheme launched by QNet. I have also considered the conclusive report of Serious Fraud Investigation Agency (SFIO) under the Company Act) SFIO Prima facie, there is material to hold that the business conducted by Qnet is covered under PCMC Act and also under Drugs and Magic Remedies (Objectionable Advertisements) Act, 1954."
"However," the Bench added, "the things are not as straight as they are perceived on the surface. Assuming that the scheme was launched with a noble object to give benefit to maximum people to make money quickly and easily by selling products of the company, however, after going through the material placed before me including the statements of the witnesses, I am of the view that in the midway, the intention of the applicants/ accused, who are the directors and shareholders of the company, became dubious. They had knowledge that more members are suffering financial losses and they are not satisfied with the products. 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."
Earlier in May 2016, Gurupreet Singh Anand, the original complainant in the QNet multi-level marketing (MLM) scam had demanded a detailed probe of the role played by Bollywood stars like Shah Rukh Khan, Aamir Khan, Anil Kapoor, Boman Irani and Pooja Hegde, in promoting the company. He had filed a complaint against Bollywood actor Boman Irani and his son for allegedly aiding and abetting the scam in India. In his complaint, Anand had provided details like training conducted by Mr Irani at Khandala. (Read more QNet: Complaint filed against actor Boman Irani and his son
) Anand also highlighted the involvement of another actor Pooja Hegde in the QNet scam. Pooja is daughter of Latha and Manjunath (MS) Hegde and was featured in the Hrithik Roshan starrer Mohenje Daro, released this year. In August 2013, the EOW had arrested Bandra-based Manjunath Hedge for cheating in the QNet case.
Before that in February 2016, the special Maharashtra Protection of Interest of Depositors (MPID) Court had also rejected anticipatory bail applications of these five. The Economic Offences Wing (EOW) of Mumbai Police, which is probing the case, had invoked the stringent MPID Act against controversial multi-level marketing (MLM) company QNet, which has denied any wrongdoing on its part.
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.
Earlier, the SFIO in its detailed ‘secret’ report
on GoldQuest International Pvt Ltd and Quest Enterprises India Pvt Ltd has called multi-level marketing (MLM) schemes run by overseas operators as “a potential threat to national security”.
QNet, the controversial, Hong Kong-based operator uses multiple names for its MLM scheme and GoldQuest, QuestNet, QNet, QI Ltd and QI group are some of its better known names.
In February 2014, the ED registered a case under the prevention of money laundering act (PMLA) against QNet, Vihaan Direct Selling, Ferreira and QNet founder Vijay Eswaran and three other independent representatives (IRs) of the MLM operator.
According to Anand, the MLM scam may have cost the country about Rs7,000 crore since the money is being remitted abroad.