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21
December 2016
 |
QNet (The Total Investment & Insurance
Solutions)
QNet, the controversial Hong Kong-based multi-level
marketing (MLM) company, has been trying hard to get support from its peers,
but with no success. While a few powerful members are not allowing QNet’s entry
into the Indian Direct Selling Association (IDSA), its franchisee Vihaan Direct
Selling (India) Pvt Ltd’s application too has been rejected by the other
association, Federation of Direct Selling Association (FDSA) The Total Investment & Insurance
Solutions
According to documents seen by Moneylife, the
FDSA has rejected membership application of Vihaan Direct Selling (India) Pvt
Ltd. Michael Ferreira, former world billiards champion, owns 80% stake in
Vihaan, while the rest is owned by Malcolm Desai. Both Ferreira and Desai,
along with Vihaan's directors, Magaral Balaji and Srinivas Vanka, were arrested
by police in October in the multi-crore QNet scam. The Total Investment & Insurance Solutions
While rejecting Vihaan's membership
application, FDSA said, "The Federation is repeatedly being approached by
Economic Offences Wing (EOW) of Mumbai Police seeking various information
regarding the company (Vihaan). The (Scrutiny) Committee feels it has collected
the information about the pending court cases and is serious on the sub-judice status of the company. The Committee
feels that the sub-judice status of the company (Vihaan) will
jeopardise the faith of the government/ industry bodies in the Federation,
hence recommends that the company need to come out clean before being
considered by the Federation." The
Total Investment & Insurance Solutions
Srinivas Vanka (V Srinivas Rao), the operations
head of Vihaan, has been trying hard to get membership of FDSA. He met and
tried to convince FDSA officials several times. In the letter, the FDSA says,
"...during the personal meeting at Hyderabad, we have received your logics
(sic) and justification on your defence over what is happening in the field.
You may be right at your end, but what image you carry is more important, which
is created by the activities seen at ground level."
The FDSA, in the letter dated 17 April 2016
also says Vihaan is in the recruitment business rather than retailing, allowing
an independent representative (IR) to open as many as 21 business centres under
one ID. The letter says, "...the company revenue proportion of ID
activation sales and retailing sales, clearly indicates that new recruitments
is the only business in focus, not retailing."
FDSA says that according to its code of
conduct, products from members should be reasonably priced, have optimum
utility and be re-saleable. "Your (Vihaan's) core product, the holiday
voucher is one such product, which is not falling in line with our FDSA norms.
The magnetic pendent is another product falling in grey area, which has
notional value...the Committee is not satisfied and considering your product
line unreasonable for the masses where from the company (Vihaan) is currently
collecting its major revenues," it added. The Total Investment & Insurance Solutions
The rejection letter from FDSA also raises
questions on refund and indiscipline in Vihaan, citing complaints it received
from people who claim they have been dragged into QNet. FDSA says, "At
ground level, it is a common practice that the IRs put soft pressure on a
prospect for depositing couple of lakh rupees in the company. If the prospect
is not having the funds, a personal loan is processed in no time under some
arrangement with the branch manager of the bank. This is a case of lawlessness
amongst the IRs and poor control of the company on them. You cannot do away
this fact by classifying this as an act of unsatisfied people. The Committee
considers this as no less than disguised money circulation and gross
indiscipline in the industry." The
Total Investment & Insurance Solutions
Vihaan’s application for membership of FDSA
also reveals how its director V Srinivas Rao also misled the courts of law
across the country. He had repeatedly stated in his submissions before the
courts that he had resigned as director from Vihaan in August-September 2014
and thus had no links to the QNet franchisee thereafter. However, the
application submitted to FDSA is dated 16 December 2015 and mentions V Srinivas
Rao as head of operations of Vihaan. The Total Investment & Insurance Solutions
Earlier in October 2016, Ferreira and two others
surrendered before a Special Court following orders from the Bombay High Court.
In September, the HC had asked five prime accused, including Ferreira, Desai,
Srinivas Rao, Magaral Balaji 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 and the other three were later
arrested by the Hyderabad police. They are now lodged in Taloja Jail, near
Mumbai, in Maharashtra.The Total
Investment & Insurance Solutions
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