Friday, 25 October 2013

Did Bernama perform a thorough check on Qnet?

Bernama has written several glowing articles about Qnet, a direct selling company based in Hong Kong:

Malaysia To Play Key Role In Qnet's Quest To Achieve US$1 Billion Revenue Target By 2018

Success of Qnet shows how people without a business background can do well (published on The Malaysian Insider, but written by Bernama)

"He said the direct selling and multi-level marketing industry was very strong and vibrant in Malaysia against a backdrop of a good legal infrastructure and support from the government which recognised the importance of the industry to economic growth."

Yes, I agree, Malaysia has an excellent legal framework, but unfortunately also a rather weak enforcement.

The entry about Qnet in Wikipedia can be found here.

A sample of what has been written there (the original article at Wikipedia's website gives the relevant links):

"Many governmental entities have described QNet's business model as a simple pyramid scheme: early entrants earn money, and as the number of Independent Representatives (IRs) increases, finding more IRs to join becomes difficult or impossible; IRs that join late do not earn enough to cover their first outlay and the model collapses.[20][11] QNet's Public Relations manager said that QNet offers a business opportunity that doesn't have high start-up costs. When an IR recommends the product the customer makes a purchase through QNet's system and the IR receives a commission.[9]


APLI, the direct selling Association of Indonesia, considers GoldQuest or QuestNet a pyramid scheme. Egypt, India, Iran, Indonesia, Nepal, Rwanda, Saudi Arabia, Sri Lanka, Sudan, Syria, and Turkey accused and sued QNet for allegedly operating a product-based pyramid scheme. The company denies any wrongdoing, and some court cases against it were dismissed."


"The Amezcua Bio Disc (also spelled BioDisc and BioDisk) is one of the company's products. QNet claims that the Bio Disc can "redefine and harmonise the energy of water, greatly maximising its positive affect on the human body". These and other claims relating to the product have been denounced as fraudulent by various scientists, media commentators and watchdogs. Critics have noted that the claims are based on pseudoscientific concepts such as hexagonal water and that they have never been validated by peer-review. QNet has stated in a document published to its representatives that there are no known test and approval bodies to date on such products."



Australian Politician Cameron Thompson, the Nepalese Home Ministry, the Sri Lankan Central Bank, and the Iranian Government have described GoldQuest as a pyramid scheme. In 2002, the Australian Office of Consumer and Business Affairs listed the company as one of 61 alleged pyramid schemes.[27][28][better source needed] The Nepalese Home Ministry banned the company from operating in Nepal in 2003, and Bahadur Manandhar, chief of the foreign exchange department of the Nepal Rastra Bank, stated GoldQuest was “a hundred percent fraud.”[29] The Sri Lankan government banned GoldQuest in 2005, claiming that the company had caused 15 million dollars to leave the country.[13][30][31][15] The same year, the Iranian government also banned GoldQuest, after prosecutors found that company activities had “led to the exit half of a billion dollars from Iran.”[32]

Qnet (then operating as GoldQuest) also faced legal action in India in 2008.[33] The case resulted in Interpol's arrest of Vijay Eswaran and other company officials for fraud. The case was fought out substantially in the courts of Manila and Jakarta. After spending three weeks in jail, Indonesian courts released him. A Manila court dismissed the charge soon afterward.[16][34] QNet has advocated for the regulation of Indian multileval marketing companies, and for the banning of pyramid schemes in India.[35][19][36]

In 2008, around 3000 people marched on the presidential palace in Kabul to demonstrate against the government's temporary withdrawal of QuestNet's license to operate in Afghanistan. The business started in Afghanistan with around 600 IRs in 2006 and had expanded to 21,000 when the government temporarily withdrew the license to enable it to write operating laws.[37]

The Rwandan Government's Ministry of Finance banned QuestNet in 2009 for violations of company and tax laws after The National Bank of Rwanda described the company as a pyramid scheme which "is collecting money from subscribers in Rwanda and sending it outside to companies called Park King Development and DBS Hong Kong using swift transfer."[38] Citing article 4 of the companies act and articles 9 and 10 of the tax act, Minister James Musoni issued the order forcing Questnet and its IRs to immediately stop all activities.[39] Questnet appealed the ban, and the appeal was granted in 2012, with the condition that it strictly follows the country's laws in the future.[40][41]

Also in 2009, The Sudanese government banned QuestNet after allegations were made relating to poor product quality and the and non-receipt of products.[42][43] After the shut down, another agent wanted to renew Questnet's contract in the Sudan, but the government refused.[citation needed] The same year, the Syrian ministry of economics shut down QuestNet for violating its commercial registration.[44] Ramzy Asawda, Director of Facilitation and Trade Efficiency in the Syrian Ministry of Economy, stated QuestNet had operated a pyramid scheme in Syria, withdrew billions of Syrian pounds from the country, and paid few taxes in return. The shutdown also applies to other agencies of the company.[45]

In 2010 Questnet opened in Turkey with 150 distributors; 80 of which police detained in an investigation that charged 42 with gaining an unfair advantage.[46] In 2011, the Turkish Trade Ministry investigated QNet following complaints that it was a rebrand of Questnet. The Ministry also revealed that Quest was fined TL3.64 million(USD 1.9 million) for its illegal activities in 2010.[47] In 2011, QI Group resumed operations in Turkey with the acquisition of the Dögan Hotel in Antalya.[48][49]

The governments of Egypt, Saudi Arabia. Indonesia, and India have accused QNet of operating a product-based pyramid scheme.[50][51][52][28] Dar al-Ifta issued QNet a Fatwā in 2012 stating its business in Egypt is haram (forbidden under Islamic law) and could harm the country’s economy.[53][54] The same year the Saudi Arabian Ministry of Commerce and Industry banned Qnet, accusing the company of theft, falsification, and failure to register with the ministry, and published an official message warning the Saudi people to avoid involvement in fraudulent schemes operating in the country, mentioning QNet specifically.[55][56]

In August 2013, the Economic Offenses Wing (EOW) of the Central Bureau of Investigation of India made the first arrest in the QNet case which began in India in 2008. Members of the company were arrested for cheating and were remanded into police custody till August 22. EOW was probing a suspected fraud committed by the firm. Two teams were sent to Bangalore and Chennai for investigations into this case. The police suspects arrested members to be linked to Vijay Eswaran, considered the prime accused in the QNet case.[57] the case goes on and Cops freeze 6 bank accounts of marketing firm in the same month and arrested member has been sent to judicial custody.[58]

Some recent articles about Qnet in "The Times of India":

EOW registers case against multi-level marekting firm, QNet, for fraud
EOW makes first arrest in QNet case
Cops freeze 6 bank accounts of marketing firm

Bernama does not mention any of the above controversies in its rather glowing articles about Qnet. I hope that they did a very thorough check on Qnet and that they found convincing evidence that Qnet is nothing to blame for all the above controversies. It would be good, in the sake of transparency and credibility, if Bernama would share this evidence with its readers.

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