Sessions Court Greater Mumbai today granted anticipatory bail to Michael Ferreira and stayed proceedings on the lookout notice issued against him earlier by the Economic Offences Wing of Mumbai Police in the QNET multi-level marketing company case.
Michael Ferreira, who has been out of the country, had missed an earlier summons by the Mumbai police to appear for investigations, leading to the issue of a look out notice that constrained his freedom of movement.
Ferreira again defended QNet, calling it a genuine business.
A statement by a public relations agency, apparently on behalf of the former Billiards champion, said Ferreira was in Malaysia attending a long standing ailment in December.
“Medical tests had earlier indicated that he was recovering and scheduled to travel back to India soon and help with the ongoing investigations,” it said.
The police want to question Ferreira under sections of the Prize, Chits and Money Circulation Schemes (Banning) Act 1978 for his association with QNet, a multi-level marketing company.
The company, of which Ferreira is a shareholder, has been accused of defrauding investors of Rs 425 crore.
The statement confirmed that Michael Ferreira is a shareholder in the Indian franchisee for QNET – Vihaan Direct Selling (VDS).
The company has been alleged of operating a “binary” compensation plan which is “banned” in India.
“However, this is not true. QNET operates a “hybrid” compensation plan and there is no law governing this industry as-of-now and therefore no ban on “binary” or for that matter any other compensation plan,” the statement went on.
The company maintains that such situation are essentially symptoms of ambiguity at the legislative level which have enabled fraudulent companies to operate under the garb of direct selling companies duping thousands of citizens of their valuable savings.
“In the absence of clear guidelines it becomes impossible for Police to immediately differentiate one from the other,” it said.
It said that ASSOCHAM, an industry body, highlighted the immediate need for the government to act for the interest of the citizen-consumer, distributors and genuine DS/MLM companies in India recently this month, in a In a letter addressed to the Finance Minister, Consumer Affairs Minister, Minister for Corporate Affairs and Home Minister.
The industry body had 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 deposits 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.
