Hyderabad: The ministry of corporate affairs (MCA) has initiated winding up proceedings of Vihaan Direct Selling Private Limited, a franchise of QNet, which used to run Ponzi and binary schemes and cheated the public. It was involved in a Rs 5,000-crore cheating case that was busted by the Cyberabad police.
The Vihaan promoters targeted software employees, unemployed youth, homemakers etc., by offering them a purported project which would give them huge profits. Once the customer joined by paying the fee the ‘upliner’, the introduced person or to the Vihaan account (QNet franchisee), a username and password would be generated.
Speaking about the way the alleged scam operated, Cyberabad commissioner of police V.C. Sajjanar, said, “The company has various combinations of product-based packages for the new entrants based on their payment. The QNet/Vihaan business model is a simple pyramid scheme in which the early entrants earn quick money. As the number of independent representatives (IR) increases, finding more IRs (newcomers) to join the scheme becomes difficult or impossible. IRs who join late does not earn enough to cover their first outlay and the model collapses. It works as a binary scheme.”
He said Vihaan Direct Selling Private Limited (QNet) was executing a Ponzi scheme and had raised huge money as advances from customers. The ministry received many complaints. The company was able to gain unreasonable profit margins and was paying huge commissions to its IRs by falsely representing that the products and services offered by the company were of a particular standard, quality, grade, composition, style or model, Mr Sajjanar said.
Recently, Mr Adapa Arvind a former software professional, who was associated with QNet, committed suicide due to loss and cheating in the Madhapur police limits. It came to notice that two others who were associated with QNet, one from Chennai and other from Maharashtra, had lost their lives. Details being ascertained, Mr Sajjanar said.