The Economic Offences Wing (EOW) of the Mumbai Police on Friday arrested eight top members of Vihaan Direct Selling (India) Pvt Ltd, a franchise of Hong Kong-based company Qnet, that was allegedly indulging in a binary scheme — one where existing members are required to bring in more members.
Padmashree awardee and billiards champion Michael Ferreira is an 80 per cent shareholder in this company.
The EOW is yet to decide if Ferreira should be called in for questioning. He has been claiming that he was only a shareholder and had no idea about the company’s activities, officials said.
“Qnet has been trying to operate in India under various names for several years but has always been getting into trouble with the law. For the last two years, it has been operating through Vihaan, its master franchise based in Bangalore. It has, till date, made Rs 425 crore through its activities, which include selling of cosmetic and other products as well as attracting as many members as possible,” said Rajvardhan Sinha, Additional Commissioner of Police, EOW.
“We had earlier raided its offices and arrested their regional leader Manjunath Hegde. On Friday, we have arrested eight top level members from various places in Mumbai,” added Sinha.
According to officials of the EOW, Vihaan Direct Selling had been under the scanner since April this year after one Gurpreet Singh complained to the agency alleging that the company had cheated his wife to the tune of Rs 31,500. Two members of the company had allegedly convinced his wife to become a member of the company and had taken the amount as membership fee. The EOW found that the company had attracted over 90,000 people as its members.
“Such kind of binary scheme is banned in India under the Prize Chitfund and Money Circulation Schemes (Banning) Act,” said Sinha.
The arrested members allegedly made between Rs 40 lakh to Rs 2.5 crore through Vihaan. The agency has already frozen around Rs 100 crore of the company’s members in various bank accounts till now.
*The arrested members allegedly made between Rs 40 lakh to Rs 2.5 crore through Vihaan
* The EOW has frozen around Rs 100 crore of the company’s members in various bank accounts
* Such binary scheme is banned in Indian under the Prize Chitfund and Money Circulation Schemes (Banning) Act