Process to close Ponzi schemes firm Vihaan Direct Selling India begins

Based on cases registered by the Cyberabad police, the Registrar of Companies (ROC) inspected the accounts of the firm and found various fraudulent activities aimed at duping investors.

Published: 28th August 2019 02:20 AM  |   Last Updated: 28th August 2019 02:20 AM   |  A+A-

Cyberabad Police Commissioner,  Cyberabad Police

Cyberabad Police Commissioner Sajjanar displays products of QNet during a media conference in Hyderabad on Tuesday (Photo |EPS)

By Express News Service

HYDERABAD:  The Union Ministry of Corporate Affairs (MCA) has initiated proceedings to wind up the activities of Vihaan Direct Selling India Private Limited, the Indian franchise of Hong Kong-based MLM firm QNet.The ministry also issued Look Out Circulars (LOCs) against former World Billiards champion and Padma awardee Michael Fereira and 11 others who are associated with the company as directors and promoters.

Based on cases registered by the Cyberabad police, the Registrar of Companies (ROC) inspected the accounts of the firm and found various fraudulent activities aimed at duping investors. The Cyberabad pol ice, meanwhile, appealed to the public not to join or make payments to the Vihaan group or any firms operating MLM or ponzi schemes.

“There are 38 cases, and 70 people associated with the firm were arrested in Cyberabad. There are cases in other parts of the country too. The ROC also found several violations during inspection of their account books,” Cyberabad Police Commissioner VC Sajjanar said.

The Cyberabad police have already served notices to celebrities like Shah Rukh Khan, Anil Kapoor, Boman Irani and Allu Sirish in connection with their relation to QNet and its franchises, and they have sent their explanations through their advocates. “They are being verified. The investigation will proceed based on the outcome,” said Sajjanar.

Notice out to warn public about Vihaan group

The MCA also issued a notice alerting the public about the group’s activities. “The inspection report is uploaded on the website of the Department of Consumer Affairs [...] to make (the public) aware so as to prevent any possible fraud by the company under the garb of direct selling and multi-level marketing (schemes),” it said in the notice.

The MCA has informed the Cyberabad police that the ROC conducted inspections on the group under provisions of the Companies Act. Prosecutions have been launched by the ROC, and LOCs have been issued against 12 persons. The ROC has also filed a petition before the NCLT for winding up the company.
The ministry also informed the victims that in the garb of direct selling and e-commerce businesses, the company drained more than `20,000 crore out of India.

Inquiries further revealed that Qnet had been operating in India as Goldquest and Questnet, Pallava Resorts, but stopped activities after the intervention of regulatory agencies. The Vihaan Direct Selling India Private Limited also sold products to its members with a profit margin of 160 to 416 per cent. 

The balance sheet revealed that the products sold were immaterial and the firm ran an illegal product-based pyramid scheme. Even while selling products, the company sold the same ones to different persons on the same mentioend date with huge differences in prices.However, while a former techie, Adapa Aravind, who was associated with Qnet, committed suicide, allegedly after incurring losses by investing in Qnet, two similar cases were reported in Chennai and Maharashtra, the Cyberabad police found.

QNet denies charges
QNet claimed the public notice was premised on the purported ROC report and was fallacious. It lacks merit & understanding of the business, QNet claimed, adding that its distributors are not investors

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