KUALA LUMPUR: Global direct selling company QNet Ltd will not pull out from India, said the founder and executive chairman of the QI Group of Companies, Datuk Seri Vijay Eswaran (pic).
Attributing the group’s decision to stay on to “a wave of good feelings” towards business in India with the recent change of government there, he said India still remains a logical target market for the group.
Hong Kong-based QI Group is a conglomerate whose flagship company, QNet, is in the business of direct selling in several countries, including Malaysia.
The Times of India, in a series of articles in 2013, had reported that QNet India was being probed for allegedly duping thousands of investors by selling them plastic and glass products that it claimed could cure diseases like cancer. According to the report, the probe came about after someone filed a First Information Report (FIR) against the company at the economic offences wing of the police dept in Mumbai. Five people, including Eswaran, were reportedly named in the FIR, the report said, adding that arrests were expected soon.
But in an interview with The Edge weekly later in the same year, Eswaran denied the fraud allegations, dismissing them as indicative of corruption and poor journalistic standards in India, adding that the group would seriously consider pulling out if the Indian government did not do anything to protect foreign investors and legislate the direct- selling industry.
At the same time, a spokeswoman for QNet said there was no arrest warrant for Eswaran.
“We’re not leaving. This tide needs to change. Everyone is waiting and hoping that the new administration will make some crucially required changes. We will keep trying.
“We have a lot of hope to turn things around and there are even discussions about setting up a new law on network marketing, which we have been lobbying for since a long time ago,” he said recently.
India has no legislation governing the direct-selling industry and this has often resulted in problems for such firms. QNet described it as one of the biggest challenges it faced in India.
“The Indian Parliament has acknowledged the need for a direct- selling act and they will come up with a law to address this,” said QNet director of corporate affairs Zaheer K Merchant.
On the group’s target of reaching US$1 billion (RM3.2 billion) in turnover, Eswaran said he was confident it would be achieved in three years, but declined to reveal any figures on what the group has achieved thus far.
He shared that the direct sales business remains the group’s main revenue generator now, while the investment arm and travel business are among its fastest growing.
On the possibility of getting the group listed, he said it may look at listing some of its subsidiaries.
“We’re quite well internally-funded. So funding would not be a reason for us to list and thereby lose control [of the group]. It would be more logical for us to list our subsidiaries,” he added.
This article first appeared in The Edge Financial Daily, on September 15, 2014.