India's financial crime authorities just shut down one of Asia's biggest alleged pyramid schemes and they're hunting its executives across the country.

QNet, a multilevel marketing operation run from Malaysia by Vijay Eswaran, operated in India through a shell company called Vihaan Direct Selling India Private Limited. The Union Ministry of Corporate Affairs pulled the plug after investigators found the company had systematically defrauded investors through an illegal product-based pyramid scheme. The company funneled Rs. 200 billion—nearly $2.79 billion USD—out of India.

The Cyberabad Police and the Registrar of Companies uncovered the scheme's mechanics: products sold to members were virtually worthless, serving only as cover for a classic chain recruitment operation. Money flowed into the company's infrastructure, where executives and top-tier "Independent Representatives" skimmed the vast majority while tens of thousands of ordinary participants lost their investments.

Authorities have issued lookout circulars for Michael Ferreira and eleven other company directors and promoters. Ferreira, 80 years old and holding an 80 percent stake in Vihaan, was arrested in 2016. The Indian Supreme Court inexplicably stayed proceedings against him in 2017 and ordered his release. His current whereabouts remain unknown.

The police crackdown has been extensive. Cyberabad Police Commissioner VC Sajjanar said 38 cases have been filed with 70 people arrested in the city alone. Additional cases exist across other Indian states. The MCA issued a public warning on August 14th detailing prosecutions and investigations spanning multiple states.

QNet wasn't new to scrutiny. An independent review in 2017 had already flagged the company as a pyramid scheme based on its compensation structure. The operation used a network of shell companies—Goldquest, Questnet, and Pallava Resorts among them—to obscure ownership and evade shutdown attempts.

When confronted with the shutdown, QNet dismissed the investigation as lacking "merit and understanding of the business." The company insisted its model was "fully legitimate and compliant as per Indian laws" but provided no explanation of how that claim squared with authorities' findings.

The silence from Malaysia speaks volumes. Despite QNet's regional prominence and the scale of the alleged fraud, authorities there have shown no interest in investigating Eswaran or the company's operations. QNet continues operating from its Malaysian base, untouched by local regulators.

The MCA has now appealed directly to the public: stay away from the Vihaan group and any other firms running MLM or pyramid schemes. For the thousands already ensnared, that warning comes too late.

🤖 Quick Answer

What is QNet and why was it shut down in India?
QNet is a multilevel marketing operation based in Malaysia, managed by Vijay Eswaran, operating in India through Vihaan Direct Selling India Private Limited. India's Ministry of Corporate Affairs shut it down after discovering systematic investor fraud through an illegal product-based pyramid scheme, with approximately Rs. 200 billion ($2.79 billion USD) illegally transferred out of India.

How did QNet's fraudulent scheme operate?
QNet's scheme functioned by selling virtually worthless products to members, which served as cover for chain recruitment operations. Members were incentivized to recruit others rather than through legitimate product sales, creating a classic pyramid structure that generated profits primarily from recruitment rather than actual commerce.

What actions did Indian authorities take against QNet?
India's financial crime authorities, including the Cyberabad Police and the Registrar

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