Why is Michael Ferreira still in Custody – High Court wants to know

Mumbai 13th January 2017: Why is Padmabhushan Michael Ferreira is still in custody in the alleged case of cheating and money laundering against him? Justice Sadhana Jadhav of the Bombay High Court asked public prosecutor Pradeep Gharat the purpose of continuing with Ferreira’s custody despite the probe having been completed and the chargesheet filed.

Michael Ferreira had surrendered 3 months ago after his anticipatory bail was rejected by the Supreme Court in the QNET case which is under investigation for alleged fraud and cheating filled by some disgruntled consumers.

Public prosecutor Gharat however maintained that an economic offence is a “heinous crime“ as observed by the Supreme Court in a leading judgment in another case. How does this merit the continuance of custody for Ferreira, is somewhat unclear. The matter has been posted for hearing on a later date.

QNet has been under investigation since August 2013. Currently, two shareholders including Michael Ferreira of Vihaan Direct Selling (India) Pvt Ltd and two ex-directors are in judicial custody in Mumbai. These officials have been fully cooperating with the authorities while awaiting the regular bail process.

With the conclusion of investigation, the officials who voluntarily surrendered to the police for custodial enquiry are expecting some relief in form of a bail, as the legal procedures would take their own course and time. The company has posed complete faith in the judiciary and spelt out its willingness to abide by its due process time and again.

In a statement released earlier QNet has reiterated that it is a legitimate direct selling company and does not solicit any investments, take deposits or offer any jobs to its independent representatives. The question of running a Ponzi scheme or an investment scheme simply did not arise in its case as is being alleged in complaints filed against it and its office bearers and shareholders. All products are sold through the company’s eCommerce platform. Those who enrol as independent representatives have the opportunity to earn commissions from product sales.

According to reports, the direct selling industry is presently facing turbulent times and the morale of distributors is said to be low due to the prevailing ambiguity over the industry’s legal status. The direct selling industry in India is estimated at Rs 7,200 crore which would see eight times growth to Rs 64,000 by 2025, said a company spokesperson.

QNET definitely wants to invest in manufacturing but that can happen over the next 5 years once the air is cleared about the legality of the business and the industry, said the spokesperson. The company is reportedly investing approximately INR 200-300 crore over the next 5-6 years in the Indian market.

With the HC now moving forward with a logical argument on the need for the custody of Michael Ferreira the company certainly sees hope in things settling down very soon for its plans to unfold in the Indian context.