The progress of this MLM company reminds one of the Home Trade scam, where the company spent huge money on advertising and signing mega celebrities like Sachin Tendulkar and Shah Rukh Khan to gain publicity, before duping several people, including the stars
Many agents of SpeakAsia, the self-proclaimed 'biggest online survey company', have posted comments all over the Internet about the company's 'Gen X Bazaar' event being held in Goa from May 9 to 11 and the special train that was booked to take participants for the programme.
Some agents said, and we quote, "In the entire history of India this has NEVER happened - it's spectacular. SpeakAsia arranging a special train for SpeakAsians only is a BIG news." More about the special train and Goa bash later.
The company or its agents-sorry panellists and distributors-are spending huge money on advertising, social gatherings and trying to buy credibility for its dubious MLM scheme. Over the past few weeks, SpeakAsia or its distributors have published half-page ads in leading dailies and run ad films on TV channels, especially during the ongoing IPL cricket matches. So many more people have started searching for information about the company and its online survey scheme.
The company had also issued a public notice some time back. But despite the notice, many other people are also coming together on the Internet, forming groups and forums to prevent the MLM scheme from spreading further.
Following letters from Moneylife to the Reserve Bank of India (RBI) on the issue, the central bank is said to had discussed it and is contemplating action against the MLM company, according to our sources.
Now to the special train and the Goa bash. There is no doubt that booking a special train for a big bash at a beach resort in Goa was done to attract more eyeballs and so hook more gullible people who might choose to join the MLM scheme. For one, booking a special train is not a big deal and can be done by any one who has the money to pay for it. The Indian Railways charges Rs9 lakh as a minimum registration-cum-security amount and the booking must be done 30 days before the date the train is required.
Also, a special train is nothing so special, as people in and around Mumbai are aware. Every year, hundreds of thousands of of people travel by special trains to Mumbai, to pay tribute to Dr Babasaheb Ambedkar on 6th December. (About 200,000 people visited Chaityabhoomi, the memorial site, on 6 December 2010.)
Some SpeakAsia agents have been gung-ho about the cheap fare by the special train. On the contrary, we learn that each agent had to pay $170 for a ticket in the three-tier AC and they were required to pay from their e-wallet accounts, for which the currency conversion rate is Rs50 a dollar. This means the agents paid Rs8,500 or equivalent for the journey by the special train as against the scheduled fare of about Rs1,450.
Some agents said that the $170 included ticket charges and meals. However, even if one were to take into account the ticket fare from Delhi to Goa and back along with meals, the charge should not have been more than Rs5,000 per person. So, the agents paid at least Rs3,500 of their hard-earned money over and above the actual charges from their e-wallet. This excludes the cost of accommodation.
Now about the event. As SpeakAsia often said, it was a Gen X Bazaar, where people (its agents) would come together to shop products from companies like Levis, IFB, Maruti, Skoda, etc. As is the practise with many manufacturers and service providers, they offer additional discounts for a group. (Check some group buying sites) The same logic applies to the Goa bazaar as well and there was nothing special for the agents.
How the agents would carry the products they bought, back home, is a different story. Except for the Levis jeans (that they could wear or carry in their bags) and automobiles (they would have to drive back in the vehicle and forget the special train ride back), all other products would have to be transported and this would cost more money. (Try offering money from an e-wallet to the 'truckwallah' or any local goods carrier.) In addition, the goods purchased at a discount at the bazaar would likely attract local levies, like octroi, that would have to be paid in real currency.
Some agents were very excited about the entertainment programmes in the evenings. According to the information obtained from some blogs, Bollywood actor Rani Mukherjee and Neha Dhupia and performers like Mika Singh and Abhijeet Sawant were there to entertain the agents. All the names mentioned are commercial artists who do entertainment shows anywhere and everywhere for a fee. Here again, nothing special.
A gathering of people under the pretext of a seminar or a bazaar is not unusual, especially in MLM circles. In fact, all multi-level marketing (MLM) companies have such gatherings at posh locations regularly to keep their flock intact and growing. Remember, how JapanLIFE and GoldQuest or QuestNet used to invite people to functions at five-star hotels?
Just for reference, a few years ago, Home Trade endorsed mega celebrities like Sachin Tendulkar, Hrithik Roshan and Shah Rukh Khan to cover up its meticulously planned financial scam. (Read, Home Trade's 'starry' gameplan.)
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Special report on SpeakAsia by Star News
(Courtesy: Star News)
The Pension Fund Regulatory and Development Authority is trying to revive the New Pension System starting with a review of fund managers.
The Pension Fund Regulatory and Development Authority (PFRDA) will hold a meeting with fund managers of the New Pension System (NPS) on 17th May to review their performance, a senior official of PFRDA has told Moneylife.
"We are going to have a meeting with the fund managers to review their performance. They are supposed to give us presentations on 17th May," said Kamal Kumar Chaudhry, chief general manager, PFRDA.
The NPS was introduced on 1st January 2004 and it is available to all citizens on a voluntary basis and is mandatory for Central government employees (except armed forces personnel) appointed on or after 1 January 2004.
Six fund managers-LIC Pension Fund Ltd, SBI Pension Funds Pvt Ltd, IDFC Pension Fund Management Co Ltd, ICICI Prudential Pension Funds Management Co Ltd, Kotak Mahindra Pension Fund Ltd and Reliance Capital Pension Fund Ltd manage funds and subscribers are free to choose any one of these managers.
Though NPS has immense potential for retirees, especially those who do not manage a steady source of income after retirement, there has been a tepid response to the scheme.
Moneylife has been constantly pointing out that there are a number of lacunae in the way the government is handling the scheme. (Please scroll down for more on this issue).
The lukewarm response for this scheme-right since its inception-is thanks to the lack of interest from service providers in selling the scheme and stringent restrictions for withdrawal. There is also no authentic data or mechanism to access the historical performance of the NPS fund managers for common citizens.
PFRDA, which acts a regulator for the pension sector and is supposed to maintain transparency in this field, is not updated with the past performance of the fund managers.
An investor can only access the previous day's net asset value (NAV) of any scheme under the NPS on the Central Recordkeeping Agency's (CRA) website. A few fund managers also publish the previous day's NAV as well as historical NAV, but there is no way to get a comparative view of all the funds so that a comparison can be done.
"As far as yearly performance is concerned, we have received details from the fund managers and our consultants are working on that. After the meeting, we will publish all information on our website in the same week," said Mr Chaudhry.
Even CRA, which bears the responsibilities of recordkeeping, administration and customer service functions for all subscribers of the NPS, does not maintain the historical performance of the fund managers.
"We cannot provide you any information regarding the fund managers' performance. For the desired information you can contact the PFRDA," an executive from CRA told Moneylife.
Under the NPS guidelines, fund managers are allowed to invest in the specific class mentioned by subscribers and the proportion of the investment is also defined by the PFRDA for every class. There has been very narrow room for the fund managers to play with their corpus.
Practically, there should not be much of a difference in returns. However, it has been observed that fund mangers sit on a large portion of cash that leads to losses in returns.
According to a media report, the performance of NPS fund managers was varied during calendar year 2010. In the Tier-1 category, Reliance was the top fund manager for the 'E' class. Reliance gave 24.66% return in the 'E' class, while SBI (which generated 16.47% return) and UTI (15.66% return) took second and third place in the same class. In the 'C' class, SBI gave 13.30% return and UTI's return was 8.83%. In the 'G' class, there was a huge difference between SBI and Reliance's returns as SBI managed 10.36% return, whereas Reliance gave only 7.06%.
These figures clearly indicate that much needs to be done to get the fund managers live to the letter and spirit of NPS.
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• Pension regulator's incentive to funds to make New Pension System work will fall flat, say experts
• Will Yogesh Agarwal create a moral hazard for the New Pension Scheme?
• Another turf war: PFRDA wants pension fund managers to provide annuity, not insurers
• Govt introduces Bill to give statutory power to PFRDA
Companies with a turnover of more than Rs1,500 crore will require to seek the approval of the Competition Commission before merging with another firm; rules come into effect on 1st June
New Delhi: The Competition Commission today notified regulations requiring corporates to seek its approval before going in for high-value mergers and acquisitions.
According to the notification, the CCI will take a view on the proposed merger deals within 180 days of the filing of the notice by the companies.
The regulation, titled “Competition Commission of India (procedure in regard to the transaction of business relating to combinations) Regulations, 2011,” will come into force from 1 June 2011, the competition watchdog said. The parties would have to submit a fee of up to Rs1 lakh along with the application seeking the CCI’s approval, reports PTI.
“The CCI Act empowers the Commission to regulate combinations which have caused, or are likely to cause appreciable adverse effect on competition,” the Commission stated. Under the regulations, the Commission can approve the merger proposal, reject it, or modify it.
The regulations follow the notification in March of Section 5 and 6 of the Competition Commission Act, 2002, which deals with mergers and acquisitions (M&As).
According to the provisions in the Act, companies with a turnover of over Rs1,500 crore will have to approach the CCI for approval before merging with another firm. Only those proposals would need the CCI's nod where the companies have combined assets of Rs1,000 crore or more, or a combined turnover of Rs3,000 crore or more, as per the Act. Also, the target company’s net assets have to be a minimum of Rs200 crore or it should have a turnover of Rs600 crore for intervention by the CCI.
The CCI held wide consultations with industry bodies and law experts to work out the regulations.
The Commission was fully functional in 2009, with the appointment of a chairman and six members. Under the current process, it is empowered to check anti-competitive agreements and abuse of dominant position, drawn from Sections 3 and 4 of the Competition Act, 2002.