QNET clarifies position on India allegations

The Hong Kong-based direct selling company QNet has stated that its operations across the globe, including in India, are perfectly within the parameters of law, and any allegations of scam are entirely baseless. 

“As a business interested in sustainability, we respect the laws of the land in any country that we operate in and ensure compliance accordingly. Wherever necessary, we even adjust our business model to suit local requirements. India is one such place where we conducted our due diligence and made the necessary adjustments so that our business model does not violate any legal provisions,” said Zaheer Merchant, Director of Corporate Affairs from QNet’s international headquarters in Hong Kong, dismissing allegations of conducting an illegal business in India. 

“QNet has no shell companies in India as has been alleged. We operate through a fully Indian company that has the franchisee rights to the QNet brand,” he clarified. 

He further added, “QNet is an international direct selling company with a proud Asian heritage that was established in 1998. Today it has more than 60 lakh distributors and customers around the world with product sales in 100+ countries, 25 worldwide offices and agencies and more than 50 stockists.

In India, QNET through its franchisee Vihaan, has approximately 50,000 distributors and customers. QNet's grass-roots business model enables ordinary people from all walks of life to start their own business with minimal overhead. With hard work and dedication, QNet distributors, known as Independent Representatives (IRs), have the opportunity to become economically self-sufficient, raising the standard of life for their families and communities. 

Internationally, direct selling is a popular business model that has generated more than USD 160 billion in revenues in 2012. With no clear legislation in India to govern this industry, we are constantly getting lumped under the Prize Chits and Money Circulation Act. The Act bans all illegal money circulation schemes. It does not regulate the direct selling or MLM industry in any way,” he said.

Referring to the ongoing case against it, Merchant said, “This situation appears to be some form of orchestrated sustained attack on the company to undermine our reputation and prevent us from competing fairly and openly in India. The manner in which an alleged unmerited claim of fraud, which itself has not and cannot be substantiated, has been used to arrest IRs and freeze assets and simply does not bear up to scrutiny. We are confident that as true facts emerge authorities will also see this clearly – as a calculated attack on QNet and take appropriate action against those responsible for scheming this at the first place. First of all, the complaint involving one Gurupreet Singh Anand was officially closed on May 18, 2013. The complainant Gurupreet’s wife Parmeet Kaur withdrew the complaint vide a letter dated May 18, 2013 and submitted a letter to the Police Sub-Inspector of Oshiwara Police Station (in Northwest Mumbai) giving an undertaking in writing that the matter has been resolved. Strangely, Gurpreet Singh Anand filed the same complaint, three months after the case has been closed, and the complaint withdrawn, in the same police station. In an even stranger development, this matter, a consumer complaint involving an alleged transaction of Rs. 30,000, was transferred to the Mumbai EOW! There are so many misrepresentations about this entire case. Gurupreet Singh claims his wife bought a biodisc, where as our records show that she ordered an e-learning course, for which no money ever was paid to the company. The cheque was stopped before it could be realized and hence the transaction was nullified. All these allegations of QNet having sold his wife a ‘cancer-curing’ product are completely false. We fail to understand how Gurupreet brandishes a Biodisc on TV that he claims was bought by his wife!”.

He described as yet another gross misrepresentation, the reference to the case as a “Rs. 425 crore scam”. “QNet’s Indian franchisee, Vihaan is clearly registered with the RoC, as a direct selling/MLM/network marketing company that will promote its business in India through a network of Independent Representatives (IRs). The company has been paying all its taxes and complying with all the regulations of the government of India. In fact, all commissions payable to the IRs for product sales are paid only after TDS. All documentation has been provided to the investigators and the management of Vihaan are fully cooperating with them in this investigation. So where does the question of a ‘scam’ arise? It is unfortunate that the dispute involving Rs. 30,000 in a nullified deal has been painted as a Rs. 425 crore scam and we sincerely hope that all concerned will appreciate this factual position. Truth shall prevail,” Merchant clarified.

Source: http://www.afternoondc.in/city-news/qnet-clarifies/article_100855