Hyderabad police has taken former World Billiards Champion and Padma Bhushan awardee Michael Ferreira along with three others, into their custody following an FIR registered against them in the allegedly Rs 425-crore QNET scam.
After his anticipatory bail was rejected by the Supreme Court, Ferreira, who was booked by the Economic Offences Wing (EOW), surrendered in a special Maharashtra Protection of Interests of Depositors Act court on October 1, his 78th birthday. He was first remanded to EOW custody till October 13 and then to judicial custody, after which the Hyderabad police sought his transit remand.
QNET, a Hong-Kong based company, had started its business in India with its headquarters in Bangalore. Initially it operated through Questnet Enterprise India Pvt Ltd. "For various business reasons" according to Ajay Chanam, official spokesperson, QNET India, it then "decided to award the franchisee to Vihaan Direct Selling (india) Private Limited, where Ferriera owns a 80% stake.
QNET's controversial direct selling scheme promised people enrolling in it with an investment of less than Rs 2 lakh an opportunity to make Rs 4-5 crore. Here is a detailed version of one person's experience.
An FIR in connection with the alleged QNET scam was registered in April 2013 after Gurupreet Singh Anand, a member who did not get the promised returns, lodged complaint.
Estimates of those allegedly cheated in the scam vary from between 30000 to nearly 5 lakh investors.
QNET has been accused of using the banned binary pyramid business model for their multi-level marketing (MLM) schemes to lure investors.
Ferreira has always held that he was a mere shareholder in Vihaan Direct Selling Pvt. Ltd., whose paid-up capital in and was not involved in misleading the investors in QNET's direct-selling programme or defrauding them.
Through his senior counsel Amit Desai and lawyer Sandeep Karnik, Ferreira said that he had even attended the QNET's programmes abroad to inspire as a former sports personality and not to sell or promote its products, and he did not receve any commissions or dividends from the company.
Arguing against his client's custody, Desai had contended that it was Vihaan Direct Selling Pvt. Ltd. that had misled people and Ferreira as a renowned sportsman had given inspirational talks and did not sell products, or derive any commissions or dividends for his efforts.
Special Judge DP Surana of Maharashtra Protection of Interest of Depositors Court though dismissed the plea on the grounds that custodial interrogation was necessary in such scams to enable investigators to confront the accused with information already available and also to investigate all the accused together.
QNET's products catalogue include distance-learning packages, biodisks that reportedly provided miraculous cures for major diseases like cancer, chi-pendants, gold articles, herbal products, holiday packages, etc.
Ferreira's former daughter-in-law, Susan Chatterjee (46), had earlier been arrested in 2014 during investigations into the QNET scam.
"She had induced people to become 'independent representatives' of the firm despite knowing that it was a fraud company. In April 2012 and August 2013, she earned a commission of Rs 1.70 crore. We had frozen her bank account in November last year when it had Rs 24 lakh. Money came into her account from Ms QuestNet Enterprises and Vihaan Direct Selling India Pvt Ltd. This money can be seen from 2007 and she received money even a day prior to her arrest," an EOW officer had told the Times of India reporter.
"We have found that Ferreira's wife and two children had also received money through QNET and its sister agencies," the officer had said then.