World
Wall Street Stock Loans Drain $1 Billion a Year From German Taxpayers

Carefully timed deals help big money managers skirt dividend taxes in 20 countries, confidential documents show

 

This story was co-published with The Washington Post.

Update, May. 3, 2016:

After publication of our joint investigation, Germany’s Commerzbank said it would stop participating in the transactions detailed in this story without waiting for the government to ban them. In addition, a spokesman for the German finance ministry called the transactions “illegitimate because their sole purpose is to avoid the legal taxation of dividends.”

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German companies are known for paying some of the heftiest dividends among world stocks, one reason U.S. investment giants such as BlackRock and Vanguard are among the biggest holders of German shares.

 

But Wall Street has figured out a way to squeeze some extra income from these stocks. And German taxpayers pay for it.

 

A cache of confidential documents obtained by ProPublica and analyzed in collaboration with The Washington Post, German broadcaster ARD and the Handelsblatt newspaper in Düsseldorf details how Wall Street puts together complex stock-lending deals that drain an estimated $1 billion a year from the German treasury.

 

Similar deals extend beyond Germany, siphoning revenue from at least 20 other countries across four continents, according to the documents, which show how "dividend-arbitrage" transactions 2014 known in the trade as "div-arb" 2014 are structured and marketed as tax-avoidance vehicles.

 

The trove of transaction logs, emails, marketing materials, chat messages and other communications among deal participants involves a who's who of the world's big banks and institutional investors.

 

In deals like these, some of America's largest money managers briefly lend out some of their German holdings each year. Those shares are temporarily held by German investment funds and banks that by law pay no tax on German dividends or can claim refunds for tax withheld. The borrowed shares are returned shortly after the dividend is paid.

 

The banks or funds that borrowed the shares receive the dividends tax-free and then transfer that money to the stocks' original owner, minus fees for middlemen. The foreign investors typically end up with added income equivalent to about half the dividend tax that would have been owed.

Some firms, like BlackRock, run their own security lending programs, while others lend through big global banks that package the deals.

 

Vanguard, BlackRock and Fidelity said their securities lending follows applicable laws and is designed to help investors. Mike McNamee, a spokesman for the Investment Company Institute, which represents large money managers, said "funds have an obligation to maximize returns for shareholders."

 

Div-arb has been an open secret on Wall Street for years. It faces new scrutiny in Germany amid questions about its legality and a government push to end it.

 

The practice 2014 sometimes called "dividend washing," "dividend stripping" or "yield enhancement" 2014 is the latest version of a long-running game in which creative bankers exploit gaps and inconsistencies in foreign tax systems to benefit wealthy clients. As with corporate inversions and schemes to hide money in offshore accounts, governments lose billions and the tax burden shifts to others.

 

Some say governments have no one but themselves to blame. "Unless governments are going to get serious about harmonizing and standardizing tax rates, then governments leave themselves open to this loophole," said Josh Galper, managing principal of Finadium, a financial consulting firm in Concord, Mass.

 

Legal experts who reviewed trades detailed in the documents said they might cross the line because German law forbids transactions whose sole purpose is to avoid taxes 2014 a standard that is extremely difficult to meet. Germany's highest tax court recently invalidated one div-arb transaction that it called an "empty shell."

 

In the United States, Congress put an end to div-arb in 2010 after a scathing report by the Senate Permanent Subcommittee on Investigations two years earlier.

 

Shown some of the German transactions in the cache, Reuven Avi-Yonah, a University of Michigan Law School professor who helped Senate investigators in 2008, said he believes they were "pretty clearly tax-motivated."

 

"Regardless of whether you have an obligation to your shareholders, that does not extend to things that you know have no motivation other than reducing taxes," Avi-Yonah said. "That's illegal under current German law."

 

In one email exchange, a manager of Norway's sovereign wealth fund wrote to intermediaries to confirm his understanding of a lending transaction. The purpose of the loan, he wrote, was to "avoid" a 15 percent withholding tax on shares of international companies by agreeing to a 50201350 split of the taxes saved.

 

"We do not necessarily know the motivation for borrowing, or who the end user is, but are aware that tax considerations are one of several drivers for pricing these transactions," a spokesman for the fund said in an email.

 

Sovereign wealth funds in Saudi Arabia, Kuwait and Singapore also lend shares for div-arb deals, the documents show. So do other investment managers in the United States, including Franklin Templeton and T. Rowe Price, both of which declined to comment.

 

Banks playing a role in such trades include Barclays, Goldman Sachs, UBS, Morgan Stanley, Citigroup, Merrill Lynch, JPMorgan, Deutsche Bank and Swedish bank SEB, among others, the documents show.

 

All the banks declined to comment except for Deutsche Bank and SEB, which said their transactions abide by all applicable laws and regulations.

 

In Germany, the most prominent participant is Commerzbank, which was bailed out by German taxpayers during the financial crisis and is still 15 percent owned by the government. Commerzbank declined multiple requests for comment.

 

For German lawmaker Gerhard Schick, deputy chairman of the Parliament's finance committee, the irony stings. "Personally as a taxpayer, I feel as if somebody was pulling my leg when I found out banks that we rescued do trades at our expense," he said.

 

"This is a no-go."

 

Carefully Timed Trades

Div-arb is a big deal in Germany. A ProPublica analysis of five years of stock lending data for companies on the DAX 30 2014 the German equivalent of the 30-stock Dow Jones industrial average 2014 shows that the number of borrowed shares typically climbed 800 percent in the 20 days preceding the dividend record date. That's when companies identify shareholders who will get paid dividends.

 

Twenty days after the record date, borrowings returned to prior levels, according to share lending volume from S&P Global Market Intelligence, which provided the data for ProPublica's analysis.

The annual spikes in borrowing are as regular as blips on a heart monitor. By contrast, the number of borrowed shares of the Dow Industrials barely budges around dividend record dates.

 

There are no official statistics about the tax impact of div-arb. To estimate the annual loss to the German treasury, ProPublica calculated dividends paid by each DAX 30 company on the increased volume.

 

That amount comes to about $6 billion a year. Other German stocks pay an additional $600 million or so. Based on a typical tax rate of 15 percent for foreign owners, the combined loss is $1 billion for the German treasury.

 

A key feature of the div-arb transactions is the absence of risk for borrowers and lenders. The terms are hedged and arranged months in advance, documents show. Lenders know when their shares will be loaned out, at what prices, and when they'll come back. Collateral backs the loans in case borrowers run into financial problems.

 

Here is how it worked for one trade on May 7, 2014.

 

In a deal brokered by Morgan Stanley, which found tax-exempt borrowers, Vanguard loaned out 95,000 shares of Adidas, which was due to pay a 1.5 euro-per-share ($2.19 a share) dividend two days later 2014 a total of 142,500 euros, or about $196,000 at the currency conversion rate at the time.

 

Had Vanguard held the shares on the record date, it would have had $29,400 withheld for tax. But by shuffling the shares to a tax-exempt party in Germany, Vanguard was able to get an extra $12,700 for its investors; the remaining $16,700 was shared with Morgan Stanley and other players.

 

The Adidas shares came back five days later, netting an annualized yield of 9 percent on the loan for Vanguard's investors, ProPublica calculated.

 

To turn thousands of such small, riskless trades into more substantial profits, bankers package them into billion-dollar baskets.

 

The Adidas transaction was one of hundreds of such loans made by Vanguard mutual funds totaling more than $1 billion across several dozen stocks. Most were German; the remainder included companies from Austria, Belgium, Canada, Denmark, Italy, the Netherlands, Portugal and Switzerland.

 

The companies paid $31 million of dividends on Vanguard's holdings in May, June and July of 2014. Trade logs show that the Vanguard funds would have netted an average of 81 percent of those dividends had taxes been withheld. Instead, Vanguard got 90 percent, or $3 million more.

 

Vanguard declined to discuss any individual trades. "Securities lending is a widely accepted practice that we prudently employ to augment fund returns to the benefit of our clients," company spokesman John Woerth wrote in an email.

 

Woerth said any "insinuation that this is a tax dodge is incorrect" because stock borrowers are responsible for paying local taxes. "We are not privy to information about the end securities' borrowers, their tax situation in Germany, and what, if any, type of profit they may earn as a result of borrowing over a dividend record date," he said.

 

Vanguard receives a "securities lending fee" from the deals, along with a "dividend

equivalent payment," Woerth said.

 

The banks involved in the various Vanguard share loans, besides Morgan Stanley, were Goldman Sachs, Barclays, JPMorgan, Merrill Lynch and Citigroup. The banks all declined to comment.

For the div-arb deals to work, shares must be loaned to a German fund or bank that doesn't face withholding taxes or can file for a refund if they are withheld. The trading logs don't identify those entities. But in the Adidas deal, share ownership data from BaFin, Germany's securities regulator, offers a clue about Commerzbank's possible role.

 

The bank normally isn't a large holder of Adidas stock. But on May 7, it reported to BaFin that it owned 4.32 percent of Adidas 2014 about 9 million shares 2014 that made it a top Adidas shareholder in line for $18,792,000 in dividends.

 

Assuming that a 15 percent tax would otherwise have been paid, the German treasury lost $2.8 million.

 

By May 20, post-dividend, Commerzbank's holdings of Adidas were back to zero. The swing was not an isolated case. From 2013 and 2015, BaFin records show nearly 250 similar spikes in Commerzbank holdings of individual stocks. About 80 percent of the swings occurred at the time of dividend record dates, an ARD analysis found.

 

Commerzbank is identified in email exchanges as a provider of "end user" funds where loaned German shares can be placed without being taxed.

 

Commerzbank declined to comment on its role in the deals. Chief executive Martin Blessing was asked about div-arb at the bank's recent annual meeting. Blessing, whose contract expired May 1, said the bank handles more than 100,000 transactions a day with thousands of participants.

While acknowledging that some transactions occur around dividend dates, he said the bank's auditors ensure that "all transactions are in compliance with the law."

 

For Investors Who 2018Suffer' Taxes

Investment firms say they lend shares to benefit their clients and won't discuss why demand spikes around dividend times, but the documents offer some explanation.

 

Marketing materials from one bank identify the trades as a "risk-controlled" way for investors who "suffer" taxes to "recapture" dividends that are withheld.

 

Another bank prepared an explainer for clients that says, "We're not going to pretend to be tax experts, but it goes something like this." The explainer then details how investors can avoid taxes by lending shares over dividend dates.

 

In one set of messages, a senior securities lending executive at Vanguard gave an intermediary permission to lend out shares of an international stock for "the dividend yield enhancement trade."

 

In another case, Commerzbank emailed another party in one deal asking to renegotiate after learning that a portion of the dividend would be tax-exempt. That would reduce the tax benefit of the transaction.

 

Accounts of meetings show that at least some firms backed off trades. One document describes Goldman Sachs bankers saying their traders abandoned certain deals in 2013 because of increased internal scrutiny of div-arb. Goldman Sachs declined to comment.

 

In another document, a senior banker cites "reputational concern" as a reason for flagging demand for div-arb trades. Despite the concern, the banker said traders on his team continued to be "proactive" and "push" out baskets of loans over dividend record dates.

 

Reputational concerns appear to have motivated some German banks to stay away from div-arb. Nord/LB, for one, said its policies forbid div-arb deals.

 

Trying to Shut It Down

New attention to div-arb by German regulators and lawmakers is the byproduct of a recent scandal involving trades in which participants had been claiming duplicate refunds of dividend taxes.

 

Those deals, known as "cum/ex" trades, were outlawed by Germany in 2012. Regulators are now moving to claw back the refunds from German banks. But the law didn't address deals like Vanguard's loan of Adidas shares, called "cum/cum."

 

Last August, Germany's Federal Fiscal Court 2014 the equivalent of the U.S. Tax Court 2014 struck down a div-arb deal involving an unidentified British financial institution and a German company. The court found that there was no transfer of economic ownership because, among other things, the borrower bore no risk.

 

A tax official in one state, Baden-Württemberg, has said the court ruling implies that similar deals may not hold. Reporters contacted officials in each of Germany's 16 states to ask if they were investigating div-arb; four said they had found evidence of questionable transactions but declined to elaborate.

 

Now, the government is trying to shut down div-arb for good. Pending legislation would force temporary share owners to hold a stock for at least 45 days and to have at least 30 percent of a stock's value at risk, restrictions that would make the deals uneconomical. Australia adopted a similar change to halt the practice there.

 

In the United States, it took the Foreign Account Tax Compliance Act of 2010 and aggressive rules from the IRS to halt div-arb, which had existed in a variety of forms since at least 1991.

Elise Bean, who as subcommittee chief counsel helped lead the Senate's investigation in 2008, said other countries have their work cut out for them.

 

Documents in the cache indicate that bankers book div-arb trades in France, Canada, Italy, Japan, Sweden, Switzerland, Netherlands, Israel, Hungary, Singapore, Norway, Denmark, Finland, Belgium, Austria, Czech Republic, Poland, Portugal, Spain and South Africa. They are also on the lookout for new markets.

 

"Everybody and their brother was doing it in the U.S.," Bean said. "And I guess now everybody and their brother is doing it abroad."

 

Pia Dangelmayer, Wolfgang Kerler and Arne Meyer-Fünffinger, special to BR Recherche, part of German public broadcaster ARD, contributed to this report.

 

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Johnson & Johnson loses second ovarian cancer case, must pay $55mn
Washington : Pharmaceutical giant Johnson & Johnson has lost its second legal battle in a row over its talcum powder which allegedly causes cancer. The company must now pay $55 million to a woman who says she got ovarian cancer after using the product.
 
Less than four months after losing a $72 million case in the same St. Louis, Missouri, courthouse, Johnson & Johnson was ordered to pay $5 million in compensation and $50 million in punitive damages to Gloria Ristesund.
 
The 62-year-old South Dakota woman was diagnosed with cancer in 2011, which she stated was “a direct and proximate result of the unreasonably dangerous and defective nature of talcum powder” which she used for almost 40 years. Ristesund’s cancer is currently in remission, since she underwent a hysterectomy and related surgeries.
 
Ristesund has also accused J&J of “wrongful and negligent conduct in the research, development, testing, manufacture, production, promotion distribution, marketing, and sale of talcum powder”.
 
Ristesund was one of over 60 plaintiffs who filed a class-action lawsuit against J&J, its supplier Imerys Talc America Inc and Personal Care Products Council, accusing them of “wrongful conduct” that caused their cancers, RT news reported.
 
J&J was planning to appeal the verdict. Company spokeswoman Carol Goodrich argued that the jurors’ 9-3 decision in favour of Ristesund contradicted 30 years of research. One of the world’s largest maker of health-care products, J&J has been denying any links between talc and ovarian cancer as well as any need to warn its consumers.
 
“Unfortunately, the jury’s decision goes against 30 years of studies by medical experts around the world that continue to support the safety of cosmetic talc," Goodrich said in a statement. 
 
“Johnson & Johnson has always taken questions about the safety of our products extremely seriously,” she added.
 
In February, J&J was ordered to pay $72 million in damages to the family of Jacqueline Salter Fox, who claimed that the company’s talcum powder caused the ovarian cancer that killed her within three years. That case was the first to result in money compensation.
 
In 2013, a federal jury in Sioux Falls, South Dakota, found that plaintiff Deane Berg’s ovarian cancer had been caused in part by Johnson & Johnson’s body powder, but Berg was not awarded any damages.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.

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QNet: Kirit Somaiya, MP demands quick action against the MLM
A former Minister and his family worked as advisors for QNet and the government needs to expedite inquiry and take immediate action, says Somaiya while raising the issue in the Parliament
 
With names of former minister of finance P Chidambaram and his wife Nalini Chidambaram coming out in the open as associated with QNet, the multi-level marketing (MLM) company in an investigation report, the issue has reached Indian Parliament as well. Kirit Somaiya, the member of Parliament (MP) from Mumbai has raised the issue of QNet Ponzi scheme and its investors in the Lok Sabha.
 
 
While raising the issue during the Zero Hour, the MP from Mumbai said, "Lacs of people lost money in another Ponzy-MLM scheme QNet, Gold Quest, QuestNet. The group also have connections in Hong Kong. Investors are not getting back money. Mumbai Economic Offences Wing (EOW) and Central Bureau of Investigation (CBI) to take action. Understood Former Minister, his Family worked as Advisors to QNet company. Need Government of India (GoI) to expedite inquiry and action."
 
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. 
 
The EOW of Mumbai Police, which is probing the case, had invoked the stringent Maharashtra Protection of Interest of Depositors (MPID) Act against QNet, which has denied any wrongdoing on its part. In February 2016, the special MPID Court rejected anticipatory bail applications of 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 20% stakeholder in Vihaan and Michael Joseph Ferreira, former world champion of billiards and 80% stakeholder in Vihaan.
 
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 Gurupreet Singh Anand, a computer consultant from Lokhandawala, Andheri, who had filed a first information report (FIR) against QNet, the MLM scam may have cost the country about Rs7,000 crore since the money is being remitted abroad. 
 
QI group units were actually banned in 2009 while operating under the names of Goldquest International Pvt Ltd and QuestNet Enterprises India Pvt Ltd after a Police action. In India, it was registered as GoldQuest International India Pvt Ltd in 2001. Elsewhere, QuestNet Enterprises was registered in November 2004 in Chennai. Between them, they had offices at Bangalore, Mumbai and Hyderabad. 
 
In addition, the Ministry of Corporate Affairs in its report for 2010-11 has specifically shown both these companies as being under investigation by Serious Frauds Investigation Office (SFIO).

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COMMENTS

Ajitabh Kumar

2 days ago

100% agree...All QNET people are big fraud....police must take action against these fraud people...

jitu moni

2 months ago

http://www.mid-day.com/articles/qnet-case-scam-mumbai-news-mumbai-airport-arrest-eow-aditi-mitra/18084164
The Economic Offences Wing (EOW) of the city police arrested a woman in her early 30s on Thursday for her active involvement in the multi-crore QNet scam. The total number of arrested accused has now reached 47, which includes Billiards champion and Padma Bhushan recipient Michael Ferreira.
In the Rs 1,000-crore scam of Hong Kong-based company QNet, nearly 5 lakh investors across the country were duped. QNet has been accused of using the banned binary pyramid business model for its multi-level marketing schemes to lure investors.

QNet posed as a marketing firm selling bio-discs, watches, herbal products, holiday packages, etc. It also claimed that by using the bio-disc, one could cure cancer and brain diseases, the police said.
Too much baggage
Accused Aditi Mitra was intercepted at the Chhatrapati Shivaji International Airport, and subsequently, arrested based on the lookout circular that had been issued against her.

Assistant commissioner of police Arun Jadhav confirmed her arrest said she was sent to police custody till March 23.
Mitra was allegedly trying to flee to Dubai for good. She was carrying eight big bags and two handbags. Of the eight, two contained her belongings; she refused to say what was in the other six, sources said.

Mitra, an independent representative associated with QNet, had been getting hefty commissions in return. She has multiple bank accounts, with one alone having Rs 25 lakh, as EOW officials found, adding that all her bank accounts have been frozen.

Active player
Investigators found that on the instructions of the other accused, Mitra was actively involved in the scam. She had brainwashed victims in order to induce them to invest in the scheme,” said special public prosecutor Pradip Gharat.

A victim, Sewri resident Arpita Majarekar, said, “She would conduct welcome sessions in malls and trap people with her sweet talk.

She had promised me and many others that if we invested in the scheme, we would get double the amount in three years.” Majarekar, who works in a private firm in Andheri, had invested nearly Rs 12.5 lakh in the scheme through Mitra.

She has been booked under relevant sections of the Maharashtra Protection of Interest of Depositors in Financial Establishments Act, Prize, Chits and Money Circulation Schemes (Banning) Act, and the Indian Penal Code.

gurupreet

4 months ago

QNET VICTIMS please beware of this shady character one Mr. Rafiq whose posing as an "High Court Advocate & RTI Activist" at various online web sites.

This guy is a sweet talker and will promise you refund from QNET if you appoint him as an advocate, he is doing nothing but cheating your further...here is his modus operandi...

He also claims to be behind several actions that have been taken place by mumbai police and FFVA but the FACT remains that he has nothing to do with any of these actions being taken all over India.

He will convince victims to appoint him as an ADVOCATE and thereafter tell victims to deposit Rs 50,000 in various bank accounts to show that he has been apponited.

He will promise that he will return back the money after showing that to QNET office but the FACT remains that after the money is transferred he will stop recieving your calls and vanish .

We have recieved multiple complaints against this FRAUD, please BEWARE you all have already been cheated dont get cheated again.

For your REFUNDS only follow the correct and LEGAL way to get your refunds along with compensation, for more info do drop us a email at [email protected]

FFVA i.e Financial Frauds Victims Association has been formed to help and provide legal aid to victims of QNET SCAM.

http://www.mid-day.com/articles/qnet-forms-financial-fraud-victims-forum-scam-gurupreet-singh-anand/17659179

Please stay away from crooks and fight for your legal rights in correct and proper way.

Regards
Gurupreet

gurupreet

8 months ago

GOOD NEWS...QNET VICTIMS IN MUMBAI...DEDICATED QUESTIONS & ANSWERS SESSION FOR QNET VICTIMS on Sunday 18th September 2016.

Ever since you lost your hard earned money in QNET SCAM, you all have multiple questions and facing multiple issues like :

1. Where and whom to approach for recovering your hard earned money?

2. How to help fight and stop this QNET SCAM?

3. How to teach your CHEATER UPLINES a lesson?

4. Issues regarding the “so called” “REFUND POLICY”.

5. Are you eligible for “Compensations”?

6. Issues regarding action buy police authorities.

7. What is the status of the court cases etc.

These are an example of just a few issues and concerns you are facing, but there is GOOD NEWS for you all. We have been working overtime to try and bring an end to these woes and issues faced by Victims of Financial Frauds like this QNETSCAM.

So guys and girls tomorrow is the BIG DAY finally , Please do join us tomorrow (Sunday) afternoon at 1.30 PM sharp at Andheri east, outside Sarangi Restaurant (Just 1 minute from the Andheri station on the east side).

Please do come and also inform other victims of the QNETSCAM.
Tomorrow (Sunday) afternoon sharp 1.30 PM, outside Sarangi Restaurant , Andheri-east, Mumbai.

Please note we have limited seats, first come first served basis allotment..so make sure to reach in time __/\__ . You can contact on 7498063701 in case of difficulty in locating us :)

Jai Hind.

jitu moni

9 months ago

http://timesofindia.indiatimes.com/city/hyderabad/4-persons-associated-with-MLM-company-arrested/articleshowprint/54204335.cms?null
Four persons, who were associated with Hong Kong-based QNET, a multi-level marketing (MLM) company, and duped 200 persons by promising them jobs, were arrested by Central Crime Station (CCS) officials on Thursday. However, the MD and directors of QNET and its sister company Vihaan Direct Selling are still at large.


Deputy commissioner of police (CCS) Avinash Mohanty said Sreenath Konda, Prasanna Kumar Reddy, V Kanchana, B Dhan Raj were arrested from different locations in the city for cheating people.


Police said the accused had been enrolling gullible people as agents by collecting Rs 10 lakh from a group of 10 persons.


Each person would be given status of promoter, direct them to attract a group (i.e., 10 persons) and make them join QNET by paying Rs 10 lakh, for which the promoter would be assured commission.

jitu moni

9 months ago

http://timesofindia.indiatimes.com/city/hyderabad/4-persons-associated-with-MLM-company-arrested/articleshowprint/54204335.cms?null
Four persons, who were associated with Hong Kong-based QNET, a multi-level marketing (MLM) company, and duped 200 persons by promising them jobs, were arrested by Central Crime Station (CCS) officials on Thursday. However, the MD and directors of QNET and its sister company Vihaan Direct Selling are still at large.


Deputy commissioner of police (CCS) Avinash Mohanty said Sreenath Konda, Prasanna Kumar Reddy, V Kanchana, B Dhan Raj were arrested from different locations in the city for cheating people.


Police said the accused had been enrolling gullible people as agents by collecting Rs 10 lakh from a group of 10 persons.


Each person would be given status of promoter, direct them to attract a group (i.e., 10 persons) and make them join QNET by paying Rs 10 lakh, for which the promoter would be assured commission.

jitu moni

9 months ago

http://zeenews.india.com/news/maharashtra/qnet-case-sc-directs-maharashtra-govt-to-file-latest-probe-report_1924693.html
Mumbai: The Supreme Court on Thursday directed the Maharashtra Government to file the latest status report regarding investigation so far on the anticipatory bail plea of World Billiards champion Michael Ferreira and four others, who are facing charges of money laundering in the multi-crore QNet case.

The next hearing in the matter will take place on September 14.

Besides Ferreira, the others whose anticipatory bail plea were rejected were Malcom Desai, Vanka Srinivas, Maganlal Balaji, all directors of M/s Vihaan Direct Selling (India) Pvt. Ltd, and Suresh Themiri, director of Transview Enterprises.
They are facing charges under Sections 420 (mischief), 468 (forgery), 471 (using forged document knowing it is not genuine) of the Indian Penal Code (IPC).

Justice Mridula Bhatkar of the Bombay High Court, who took on record the statement of public prosecutor Pradeep Gharat that investigations were still on, had in May rejected their anticipatory bail pleas.

Ferreira had started the operations of QNet, a multi-level marketing company, in India via his firm Vihaan Enteprises.

The QNet cheating case began with a complaint by Gurpreet Singh Anand, who raised his voice after losing Rs. 30,000.

According to the police, the money involved has crossed Rs. 1,000 crores in the alleged scam with more than five lakh investors allegedly losing their money in the case against QNet which is being probed by the Economic Offences Wing.
ANI

jitu moni

10 months ago

http://www.newsambit.com/eow-of-delhi-police-registered-case-against-qnet-india-and-its-irs/
NewsAmbit, New Delhi
Delhi Police Economic Offence Wing(EOW) has registered an FIR against QNET India/Vihaan Direct selling India Private Limited and its three independent representatives on the allegations of cheating and fraudulently operating the multi level marketing, which is illegal in India. Police have initiated the investigation and suspecting huge scam, which is estimated in crores.
A senior Police officer of EOW said that we received a combined complaint against QNET India and its three independent representatives from more than dozen of people in the month of March this year. As per the allegations of main complainant Anuj Jain alleged that his friend Himashu Aggarwal approached him for an business opportunity. He said that he is an independent representative(IR) of an e-commerce based company. He said that he can arrange an meeting with the other IR’s who will tell you about the business and if they find you suitable you will get chance to be a part of the company. After few days Himanshu called Anuj Jain to come with a CV at a café situated in Nehru Place area on 29 November 2015. Anuj reached there, where he met with Himanshu and his to associates Anita Jaggi and Kanika. Trio told him about the business profile and also assured that this is not a networking marketing company. They demanded Rs 6.5 lakh to be a member of the company. They also said that company has millions of customers. IR of the company is treated as a partner and also got the profit share for each sale. After three four days Anuj gave them 6.5 lakh rupees but after some time he got to know that this is a multi level marketing company and fraudulently cheating innocent persons by roping them in it’s banned business with the help of IRs.
Police said that Anuj is not the only complainant so many more complainants also approached to EOW. After which a preliminary enquiry had conducted. It was found that some persons who are termed as IR contact their friends and close persons to join a new e-commerce business. They don’t tell the name of the company or complete business module at the beginning. After alluring them they set various amounts from the victim. Independent Representatives(IR) get training during the joining and talk to make further members. These kinds of IRs of the company are operated from different cafes and food courts situated in Delhi and NCR.
Those who join the company get user id etc and products like ravel packages, some other items etc are shown purchase from their money. The delivery address given in the portal is also found of overseas area most of the time and mostly that address is too fake type location only which shows that no products are being sold and it is a completely a money circulation scheme. Two websites were found involved in the namely www.unetindia.in and www.cmetindia.net were found mated to Vihaan Direct selling (India) Pvt ltd which is stated Indian Franchisee of Hong Kong based net company. Investigations are on. Police are trying to unearth the whole network of the IRs on which this company is running its business unlawfully in Delhi. A case has been registered u/s 420/120B/34 IPC and 4/5/6 of Prize Chits and money circulation Schemes(Banning) Act,1978 .

Profiles of IRs
Himashu works with Samsung
Anita Jaggi works with RBS

jitu moni

1 year ago

Bluru QNet agent who earned 50L a yr as commission held
Mumbai: The Economic Offences Wing (EOW) has arrested Ram Singh, an accused in the Rs 1,000 crore QNet case, for earning Rs 50 lakh or more as commission each year from proceeds of the crime.

Singh, a Bengaluru resident, was arrested last week after the imigration authorities at Bangalore airport detained him over a look out circular notice (LOC) issued by the Mumbai police. "We are going through all his bank account details and trying to ascertain the source of money to his account," said DCP Pravin Padwal of the EOW.

Singh's name had cropped up during the initial investigation in 2013 but the police could not locate him then. In January 2015, a police team visited his Bengaluru residence but did not find him there. The house was locked. He is the 19th accused to be arrested in this case so far.

"We are working to arrest all the culprits in this case. A special investigation team has been formed to nab the othe accused invovled," said Dhananjay Kamalakar, joint police commissioner, EOW. Singh, said police sources, has been sending money to his daughter who is studying in Canada. "We have to know his source of income. He has sent a major chunk of money to Canada. We suspect this money was gained from QNet. Moreover, he was looking after the QNet business in Dubai and has been shuttling between Dubai and India. We got his passport number late. Soon after getting it, we issued an LOC notice and he was detained," said an officer.

A special MPIDA court in February this year rejected the anticipatory bail plea of Michael Ferreira (77) winner of the World Amateur Billiards Championship and a Padma Bhushan recipient, and four others, Malcom Desai, Vanka Srinivas, Maganlal Balaji, all directors of M/s Vihaan Direct Selling (India) Pvt Ltd and Suresh Themiri, director Transview Enterprises. They all have approached the high court now in the QNet case.

"They posed as a marketing firm which would sell bio-discs, watches, herbal products, holiday packages, etc. They even claimed that by using the bio-disc, one can cure cancer and brain diseases," cops said. Some money has been transferred to Malayasia, Singapore and Hong Kong, too, cops added.

jitu moni

1 year ago


http://timesofindia.indiatimes.com/city/mumbai/EOW-to-now-probe-celebs-role-in-QNet/articleshow/52333087.cms
Mumbai: The city's economic offences wing (EOW) is now looking into allegations that several Bollywood celebrities campaigned for the cheat firm, QNet, through advetisements or by promoting the schemes of the self-proclaimed marketing firm.

Gurupreet Singh Anand, complainant in the Rs 1,000-crore QNet cheating case, on Wednesday said at least four Bollywood actors promoted the Ponzi schemes at different times in the QNet's promotional programs in United Kingdom and Malaysia. He has submitted a 23-page letter wherein he has attached the celebrities' pictures promoting the programs.

"I have submitted letter and all the relevant information to the EOW on May 12. I am hoping some action soon," Anand told TOI. He alleged that the money was laundered from India to Hong Kong and Malaysia.

Anand was speaking at a press conference where suddenly a group of QNet sympathisers appeared with "I trust QNet" placards.. They were later asked to leave the conference room.

atul gupta

1 year ago

Be ready to fight against QNET and all your uplines including friend.
QNET REFUND and FIGHT AGAINST QNET procedure as below.

1st Option
If your purchase on portal is in INR rupees then with in 30 days of purchase or if yur purchase is in USD dollar then with in 7 days you can send email to Qnet customer support for refund otherwise Qnet will deny you refund. Then go to 2nd option which all need to go for even after yu get refund to get QNET banned from INDIA and to save our brothers & sisters.

1. Get your IR ID first.It will come to your mail box once yur upline register yyr email id on portal. If email id is given wrong then call Qnet customer support numbers and complain about yur upline. Ask yur IR ID from them.

2. Send a cancellation mail to the support team of QNET with a subject line as "REFUND IN****". provinding all details of transactions and product details.Usually IR number will be like IN4444 and all. Attach scanned PAN CARD in the mail to them.
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]

3.Once this mail is sent, the support team will create a CRF number and sends to Hong Kong team for approvals for the refund request. It will take 15-20 working days for the approvals for refundrequest.

4.Meanwhile, mail them or call them on every alternative days for an update.
Numbers:
9900060061,62,64,68-veronica
9900060605-rekha,jasvinder kaur

5.Once Refund request is completed ,they ask for the mode of payment.Ecards or Account Money transfer. Better go for Money transfer to your account.If you opt for account transfer, then you have to send a scanned copy of your account cheque leaf.

6.After 20 working days, you will get your money refunded of the product to your bank account.

7.Rest of money left , you collect from your upline by filing complaint in local police station.

2nd Option
pls all go for 2nd option even if you get money refunded as per option 1 by QNET to ban QNET and save indians.

CATCH HOLD OF YOUR UPLINE GIVE COMPLAINT/FIR AGAINST HIM / HER AND ALL YOUR UPLINES IN LOCAL POLICE STATION NEAR TO YOUR HOME AND MENTION THE COMPANY NAME IN THE FIR THAT QNET IS RUNNING BANNED MONEY CIRCULATION SCHEME. Your uplines will return you money as you can not get refund from Qnet after one month is over if products purchased through indian portal and after 7 days if purchased from world portal of Qnet.
BEFORE GIVING COMPLIANT/FIR INFORM YOUR UPLINE & HIS GRAND UPLINE THAT YOU ARE GOING TO LODGE A COMPLAINT & GOING TO MEDIA, TAKE SOMEBODY HELP (YOUR PARENTS, CLOSE FRIENDS, LAWYER )and TAKE THEM WITH YOU TO ASSOCIATION OR WHERE THEY MEET EVERY DAY. SEE WHAT HE SAY'S,THEY WILL AGREE TO PAY, IF NOT THEN GO AHEAD FOR FIR/COMPLAINT IN ANY CASE.
Besides above process kindly lodge your complaint to THE DCP, ECONOMIC OFFENSES WING, MANDIR MARG, DELHI OR EOW MUMBAI also to BAN QNET FROM INDIA.
In your complaint attach uplines photos, mobile numbers, yur bank account statement if u transferred money from your account to upline account or cash deposit receipt, pan card, address proof, purchase receipts, gurupreet singh anand first FIR copy agnst Qnet scam and google news 5-6 against Qnet. MENTION IN YOUR COMPLAINT THAT MEETING TOOK PLACE AT MARKET NEAR TO YOUR HOME OTHERWISE POLICE WILL SEND YOU TO POLICE STATION OF THE PLACE WHERE YOUR ACTUAL MEETING TOOK PLACE.
File complaint at your nearby police station and EOW/Crime branch both in yur city to fight against QNET.
For any clarification whatsapp me at my number 9871853120.

Agyat Vyakti

1 year ago

Yes together we can destroy qnet.. To help people from trap of online ponzy schemes like qnet which will come in future. Alexa and online site statistics can save you. I reccomend you to read this to save yourself from emotional trap of friends and relative who work for qnet http://qnetindiascam.blogspot.in/ share it . I need to populate this.

Dev

1 year ago

ARTICLES/TV COVERAGE OF QNET

http://www.dnaindia.com/india/report-bombay-high-court-rejects-bail-of-micheal-ferreira-four-others-in-qnet-case-2210300

http://timesofindia.indiatimes.com/city/mumbai/HC-rejects-bail-of-Micheal-Ferreira-4-others-in-QNet-case/articleshow/52172539.cms

http://economictimes.indiatimes.com/news/politics-and-nation/hc-rejects-bail-of-micheal-ferreira-4-others-in-qnet-case/articleshow/52172931.cms

http://www.moneylife.in/article/qnet-kirit-somaiya-mp-demands-quick-action-against-the-mlm/46808.html

http://www.moneylife.in/article/qnet-secret-sfio-report-says-mlm-ponzi-schemes-and-lsquo-a-threat-to-national-security-and-rsquo/46817.html

http://www.business-standard.com/article/pti-stories/police-issue-summons-to-fc-goa-official-over-qnet-sponsorship-116042901487_1.html

http://timesofindia.indiatimes.com/city/mumbai/Notices-to-football-league-officials-over-Qnet-money/articleshow/52035746.cms

http://timesofindia.indiatimes.com/city/mumbai/QNet-cheating-case-Investors-protest-outside-Michael-Ferreiras-home/articleshow/51969270.cms

http://www.thehindu.com/news/cities/mumbai/news/hc-dismisses-appeal-of-qnets-public-relations-firm/article8457252.ece

http://www.asianage.com/mumbai/cm-devendra-fadnavis-has-assured-detailed-inquiry-qnet-bjp-524

http://www.thehindu.com/news/cities/bangalore/mlm-firm-busted-5-arrested/article8468517.ece

http://timesofindia.indiatimes.com/city/mumbai/No-bail-for-billiards-champ-in-QNet-case/articleshow/50827276.cms

http://timesofindia.indiatimes.com/city/gurgaon/Seven-booked-for-cheating-bizman/articleshow/50885431.cms

https://http://www.youtube.com/watch?v=e6x2QgI6K7o&nore...

https://http://www.youtube.com/watch?v=RabPkRNutwU

https://http://www.youtube.com/watch?v=MJ5PeybXnLo

REPLY

Agyat Vyakti

In Reply to Dev 1 year ago

Yes together we can destroy qnet.. To help people from trap of online ponzy schemes like qnet which will come in future. Alexa and online site statistics can save you. I reccomend you to read this to save yourself from emotional trap of friends and relative who work for qnet http://qnetindiascam.blogspot.in/ share it . I need to populate this.ss

Dalip Singh

1 year ago

But what about all the crores that was confiscated from Speak Asia accounts,which belonged to the people.Where is the money and when will the money be returned to the gullible investors? Kirit Somaya please answer.

Dalip Singh

1 year ago

But what about all the crores that was confiscated from Speak Asia accounts,which belonged to the people.Where is the money and when will the money be returned to the gullible investors? Kirit Somaya please answer.

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