QNet convention comes to Spice again

Once again, thousands of delegates have converged in Penang for a large but low-profile direct selling convention dubbed #VCON17 at the Spice convention centre in Penang.

Last year, some 15,000 delegates, mostly from India, attended #VCON16, also at Spice.

The main organiser of the convention is QNet, a direct selling or multi-level marketing firm using e-commerce founded by Penang-born Vijay Eswaran.

Eswaran, who made it to no. 25 among Malaysia’s richest in 2013, is the founder and chairman of the QI Group, whose headquarters is in Hong Kong. QNet is their flagship company.

In India, QNet, through its franchise operations, has been mired in controversy with a string of arrests following investigations by police and the Central Bureau of Investigation.

The matter, however, has reached the Supreme Court, which has stayed 19 investigation reports. This means no investigation, trial or other legal proceedings can now take place till further orders from the highest court.

The court has also ordered the release on bail of Vihaan Direct Selling (India) shareholders Michael Ferreira (80 per cent) and Malcolm Desai (20 per cent), who had been charged with running a Ponzi scheme and duping thousands of buyers. VDS is reportedly a subsidiary of Hong Kong-based QNet.

In their petition, the duo had said, “One of the biggest challenges for the Indian direct selling industry is a lack of an express regulatory framework, as a result of which, often direct selling companies are compared to pyramid schemes under the Prize, Chits and Money Circulation Schemes (Banning) Act.”

They claimed that their business module was in line with direct selling guidelines issued by the Indian consumer affairs ministry last year.

What are the laws and guidelines in Malaysia governing direct selling and multi-level marketing firms, and how effective are the laws – and enforcement – against pyramid scams and Ponzi schemes?