QNET clarifies allegations with regards to Mumbai EOW investigations in India
QNET today welcomed ASSOCHAM’s move clearly indicating the urgent need for legislation/guideline that will help the state governments and the police authorities distinguish between genuine Direct Selling/Multi-Level Marketing companies from fraudulent Direct Selling Pyramids or PONZI Schemes. In a letter addressed to the Finance Minister, Consumer Affairs Minister, Minister for Corporate Affairs and Home Minister, ASSOCHAM highlighted the immediate need for the government to act for the interest of the citizen-consumer, distributors and genuine DS/MLM companies in India. ASSOCHAM reasoned that the confusion is possibly due to RBI sensitizing the state governments that Multi-Level Marketing (MLM) schemes fall under the PCMCS (Banning) Act 1978 but not elucidating clearly that at the operating level violation takes place ONLY when a company collects DEPOSIT through MLM schemes. The gulf of difference between companies selling products and those collecting deposits was not clarified. ASSOCHAM said that this difference needs to be specified so that Direct Selling companies do not face undue harassment.
Speaking on the occasion, Mr. Ajay Chanam, official spokesperson for QNET in India said,
“The Direct Selling or Multi-level Marketing (DS/MLM) industry took the world by storm offering a radically innovative model of leveraging word- of-mouth marketing, cutting overhead costs of store maintenance and development, product and brand promotion, sales force etc., and instead, offering these typical overhead costs as commissions to its distributors. The industry is immensely successful in providing entrepreneurship opportunities to millions of individuals with an estimated over 7 crore such entrepreneurs in India, who leveraging this opportunity, started their own businesses selling products manufactured or promoted by DSCs. On the other hand, product manufacturing companies which have smaller or zero marketing budgets find the DS/MLM industry a viable alternative platform to launch products – transitioning to traditional retails formats once these products achieve some level of critical mass in terms of demand. Most countries have formulated clear legislative frameworks and clear guidelines protecting both the DSCs and consumers in the process. Citizens have clearly benefited through the self-employment opportunity offered by this industry and China - one of the recent countries in Asia to have ushered a clear legislative framework for the industry having provided licenses to 38 DS/MLM companies is one of the largest markets today.” “QNET through its proprietary eCommerce platform offers this business opportunity to people residing in over 100 countries while adhering to the highest possible, globally accepted, best standards. Strict codes of conduct exist and policies and procedures are reinforced by training so that each one of our many thousand Independent Representatives [IRs] understand the rules governing product sales and abide by the ethical codes of business practice published and promoted by the company. Whenever informed of any regulations been violated we investigate these thoroughly. In appropriate cases, stern action is taken resulting in termination of the IR”, Ajay Chanam added.QNET currently faces investigations basis one complainant who never actually bought any product/service from the company, but due vulnerability posed to DS/MLM companies in this situation, managed to cripple the entire business.
Facts about the allegations around QNET in India
In April 2013, Parmeet Kaur, wife of Gurupreet Singh Anand, filed a complaint against 3
IRs which affected QNET and its local franchisee Vihaan Direct Selling (India) Pvt. Ltd. ['Vihaan'] at Oshiwara Police Station in Mumbai. The complaint alleged that three representatives of Vihaan sold Parmeet Kaur a bio-disc which would be able to 'help her son's brain damage'. The three representatives deny misrepresenting any product to Parmeet Kaur as this would be in breach of the agreement they signed with Vihaan. Company records indicate that Parmeet Kaur did not agree to purchase a bio-disc but signed up for an educational course. This was cancelled by her husband along with the cheque. The three representatives who allegedly misrepresented matters were not amongst those subsequently arrested for fraud! The original complaint made by Parmeet Kaur was withdrawn on 18th May 2013. The fact that Parmeet Kaur's cheque to pay for the product was cancelled was cited in the police's closing report which clearly shows that Parmeet Kaur was not a victim and under the circumstances no crime was committed. On 16th August 2013 (3 months after the original complaint was deemed not to be a crime) the complaint was re-filed by Parmeet Kaur's husband, Gurupreet Singh Anand. This is in spite of the fact that no money changed hands between Parmeet Kaur and Vihaan and there has been no other change in circumstances. Gurupreet Singh Anand confirmed in an interview that he cancelled the purchase before any product (as he claims) was received. This matter was recorded as a 'No Crime' by the Police when first reported and there has been no further change in this position. Independent legal review from various top Senior Advocates in Mumbai confirms there is no evidence of any crime.On 16th August 2013, as a result of this complaint by Anand, Vihaan’s office in Bangalore was visited by police officers from the EOW Mumbai. Due absence of a legislative framework which makes the task of differentiating genuine Direct Selling Multi-Level Marketing companies from fraudulent Ponzi schemes that operate in its garb impossible , the EOW seized several million dollars of assets and subsequently arrested nine IR’s, including two couples, and held without charge for weeks. As of 9th December, 2013, all eight IRs were released immediately on bail as soon the judge was able to hear their plea for bail. “Those who misled the police or conspired and promoted the arrests, the freezing of substantial funds and assets based on a transaction, which didn't actually take place, will be subject
of both criminal and civil complaints and litigation, the nature of which is presently under review”, said Ajay Chanam, Spokesperson for QNET in India.
QNET today welcomed ASSOCHAM’s move clearly indicating the urgent need for legislation/guideline that will help the state governments and the police authorities distinguish between genuine Direct Selling/Multi-Level Marketing companies from fraudulent Direct Selling Pyramids or PONZI Schemes. In a letter addressed to the Finance Minister, Consumer Affairs Minister, Minister for Corporate Affairs and Home Minister, ASSOCHAM highlighted the immediate need for the government to act for the interest of the citizen-consumer, distributors and genuine DS/MLM companies in India. ASSOCHAM reasoned that the confusion is possibly due to RBI sensitizing the state governments that Multi-Level Marketing (MLM) schemes fall under the PCMCS (Banning) Act 1978 but not elucidating clearly that at the operating level violation takes place ONLY when a company collects DEPOSIT through MLM schemes. The gulf of difference between companies selling products and those collecting deposits was not clarified. ASSOCHAM said that this difference needs to be specified so that Direct Selling companies do not face undue harassment.
Speaking on the occasion, Mr. Ajay Chanam, official spokesperson for QNET in India said,
“The Direct Selling or Multi-level Marketing (DS/MLM) industry took the world by storm offering a radically innovative model of leveraging word- of-mouth marketing, cutting overhead costs of store maintenance and development, product and brand promotion, sales force etc., and instead, offering these typical overhead costs as commissions to its distributors. The industry is immensely successful in providing entrepreneurship opportunities to millions of individuals with an estimated over 7 crore such entrepreneurs in India, who leveraging this opportunity, started their own businesses selling products manufactured or promoted by DSCs. On the other hand, product manufacturing companies which have smaller or zero marketing budgets find the DS/MLM industry a viable alternative platform to launch products – transitioning to traditional retails formats once these products achieve some level of critical mass in terms of demand. Most countries have formulated clear legislative frameworks and clear guidelines protecting both the DSCs and consumers in the process. Citizens have clearly benefited through the self-employment opportunity offered by this industry and China - one of the recent countries in Asia to have ushered a clear legislative framework for the industry having provided licenses to 38 DS/MLM companies is one of the largest markets today.” “QNET through its proprietary eCommerce platform offers this business opportunity to people residing in over 100 countries while adhering to the highest possible, globally accepted, best standards. Strict codes of conduct exist and policies and procedures are reinforced by training so that each one of our many thousand Independent Representatives [IRs] understand the rules governing product sales and abide by the ethical codes of business practice published and promoted by the company. Whenever informed of any regulations been violated we investigate these thoroughly. In appropriate cases, stern action is taken resulting in termination of the IR”, Ajay Chanam added.QNET currently faces investigations basis one complainant who never actually bought any product/service from the company, but due vulnerability posed to DS/MLM companies in this situation, managed to cripple the entire business.
Facts about the allegations around QNET in India
In April 2013, Parmeet Kaur, wife of Gurupreet Singh Anand, filed a complaint against 3
IRs which affected QNET and its local franchisee Vihaan Direct Selling (India) Pvt. Ltd. ['Vihaan'] at Oshiwara Police Station in Mumbai. The complaint alleged that three representatives of Vihaan sold Parmeet Kaur a bio-disc which would be able to 'help her son's brain damage'. The three representatives deny misrepresenting any product to Parmeet Kaur as this would be in breach of the agreement they signed with Vihaan. Company records indicate that Parmeet Kaur did not agree to purchase a bio-disc but signed up for an educational course. This was cancelled by her husband along with the cheque. The three representatives who allegedly misrepresented matters were not amongst those subsequently arrested for fraud! The original complaint made by Parmeet Kaur was withdrawn on 18th May 2013. The fact that Parmeet Kaur's cheque to pay for the product was cancelled was cited in the police's closing report which clearly shows that Parmeet Kaur was not a victim and under the circumstances no crime was committed. On 16th August 2013 (3 months after the original complaint was deemed not to be a crime) the complaint was re-filed by Parmeet Kaur's husband, Gurupreet Singh Anand. This is in spite of the fact that no money changed hands between Parmeet Kaur and Vihaan and there has been no other change in circumstances. Gurupreet Singh Anand confirmed in an interview that he cancelled the purchase before any product (as he claims) was received. This matter was recorded as a 'No Crime' by the Police when first reported and there has been no further change in this position. Independent legal review from various top Senior Advocates in Mumbai confirms there is no evidence of any crime.On 16th August 2013, as a result of this complaint by Anand, Vihaan’s office in Bangalore was visited by police officers from the EOW Mumbai. Due absence of a legislative framework which makes the task of differentiating genuine Direct Selling Multi-Level Marketing companies from fraudulent Ponzi schemes that operate in its garb impossible , the EOW seized several million dollars of assets and subsequently arrested nine IR’s, including two couples, and held without charge for weeks. As of 9th December, 2013, all eight IRs were released immediately on bail as soon the judge was able to hear their plea for bail. “Those who misled the police or conspired and promoted the arrests, the freezing of substantial funds and assets based on a transaction, which didn't actually take place, will be subject
of both criminal and civil complaints and litigation, the nature of which is presently under review”, said Ajay Chanam, Spokesperson for QNET in India.
Mr. Suresh Thimiri added that QNET believes in paving the way forward not only in CSR activities but also in the field of sports. Therefore, through the medium of sports, the company supports growth of Indian youth into better citizens oftomorrow.
ReplyDelete