The hitherto little known company, which is believed to be operating for the past 10 years, is selling IT educational packages through the MLM format, even as the content of its courses is available on the Internet free of cost
Over the past few years, Moneylife has regularly reported on how multi-level marketing (MLM) companies are duping gullible people with new, innovative schemes. Here is one more company which we discovered is offering a computer course on the internet, free of cost, and claiming that it has been doing this social service for many years! That's fine, only till the subscriber is asked to make an upfront payment of Rs7,446.
The company is eBIZ.com.Pvt.Ltd and it is the brainchild of Pawan Malhan. According to sources, Mr Malhan is a non-resident Indian (NRI). Some say he was a director of BITS, Pilani, while others inform that he was head of the Association of Indian Universities (AIU) for nearly a decade. Some blogs even suggest that Mr Malhan was founder of a US-based MLM company SkyBiz, which was fined $20 million by the government. Sources among IIT alumni say they have not heard about Mr Malhan and that they have no clue about his credentials.
eBIZ sells online self-learning educational packages that contain courses on operating systems, programming languages, database and some capsules on MS Office, computer hardware and internet surfing. The catch is that the subscriber is expected to learn all these courses online at his/her own cost. eBIZ.com says, "Please note: All our courses are designed for self-learning only by using computer and Internet at the cost of the learner."
The CD containing the package provided by the company has some animated tutorials. The fact is that anybody can create such animated tutorials using software like Screen Casting which is available on the Internet free of cost. (Screen Casting captures all the movements on the screen and saves it as a flash file.) What is more astonishing is that neither eBIZ nor its educational module is registered with any university or technical board; so whatever certificate is given would have little or no value in the market.
As eBIZ claims it is offering educational packages-mostlly related to information technology-many students are attracted to this. Students and their parents believe they are getting a good offer at a lower rate than other computer education institutes are charging, but they fail to understand that there is no value in such self-education, unless it is endorsed by a government recognised technical education board or university.
The business module is equally interesting. There are some cycles and orbits. The first six cycles make the first orbit that the associate has to complete within a year. To complete the first orbit the associate has to sell this educational package to 50 people in the ratio of 1:2 and he may receive a commission of around Rs26,000. In case he cannot maintain the 1:2 ratio he will not get the commission. This is about the income an individual can earn. But how does the company earn its revenue?
When a person becomes an associate he pays Rs6,550 to eBIZ. (The balance from the total of Rs7,446 goes towards service tax and cess on service tax.) To earn a commission of Rs2,000 he has to enrol two more people as his left and right legs. eBIZ's total earning works out to Rs19,500-Rs2,000=Rs17,500. The company keeps about 30% from this as its revenue.
In the next cycle, the person has two associates who each add two people down the line (in the ratio of 1:2). eBIZ's total earnings now works out to Rs6,550 x 7 = Rs48,850 - Rs6,000 (commission paid to the initial subscriber and his two associates) = Rs39,850. Let's say the subscriber's business continues in the required ratio of 1:2 till there are 25 members in the left and right down lines, then eBIZ would have to pay him Rs8,000 and the associates would each get Rs8,000 in the next cycle.
This assumes that the business continues in the required ratio. However, if eBIZ has to pay out each eligible member the commission from the 70% it gets, it could begin to pinch. That's why MLM businesses seek to register more and more people, but would like to see less and less subscribers achieving the 1:2 ratio. This explains why there are very few people (less than 2%) who joined up early and earned money and the majority end up losers.
eBIZ has been active in the northern states, where subscribers are now finding it difficult to add new candidates to the fold. So, the business in moving to other states. The target group is the same-gullible students. Why does one have to pay for something that is otherwise available free of cost over the Internet?
Toyota Kirloskar Motor has launched the Etios sedan, marking the company's entry into the highly competitive B Segment in India.
The Etios sedan will be available in four variants, J, G, V and VX, priced between Rs4.96 lakh and around Rs6.86 lakh in ex-showroom Delhi. The product highlights include innovative styling, best-in-class cabin and luggage space, superior comfort, impressive fuel efficiency and the legendary Toyota QDR.
To roll out the car, the company is setting up its second manufacturing facility in the country, investing Rs 3,200 crore. At the launch, Sandeep Singh, deputy managing director of Toyota Kirloskar Motor Pvt Ltd said that the company is aiming to sell 70,000 cars based on the Etios platform in 2011.
ICICI Pru MF unveils 371 days plan; Reliance MF floats Fixed Horizon Fund-XVI-Series 5; Motilal Oswal MF files for India's 1st US Equity ETF based on the 'Nasdaq-100 Index'; BSNL reduces STD call charges; ICICI Securities introduces new brokerage structure for its customers; Tata Motors ties up with United Bank of India for financing commercial vehicles
ICICI Pru MF unveils 371 days plan
ICICI Prudential Mutual Fund has launched ICICI Prudential Fixed Maturity Plan-Series 53-One Year Plan C, a close-ended income scheme.
The investment objective of the Plan C is to generate regular returns by investing in fixed-income securities/debt instruments which mature on or before the date of maturity of the plan. The duration of the plan is 371 days. The plan has growth and dividend (payout) option.
The new issue opens on 1st December and closes on 7th December. Since the plan will be listed on the stock exchange, load will not be applicable. The minimum investment amount is Rs5,000.
The plan will be benchmarked against CRISIL Composite Bond Fund Index. The plan will be managed by Chaitanya Pande.
Reliance MF floats Fixed Horizon Fund-XVI-Series 5
Reliance Mutual Fund has launched Reliance Fixed Horizon Fund-XVI-Series 5, a close-ended income scheme.
The primary investment objective of the scheme is to generate regular returns and growth of capital by investing in central and state government securities and other fixed income/debt securities normally maturing in line with the time profile of the scheme with the objective of limiting interest rate volatility. The tenor of the scheme is 367 days and the exit load is nil. The scheme has growth and dividend (payout) option.
The new issue opens on 1st December and closes on 2nd December. The minimum investment amount is Rs5,000. The minimum target amount is Rs20 crore.
CRISIL Short Term Bond Fund Index is the benchmark index. The scheme will be managed by Amit Tripathi.
Motilal Oswal MF files for India's 1st US Equity ETF based on the 'Nasdaq-100 Index'
Motilal Oswal Asset Management Company and The Nasdaq OMX Group have filed an offer document with the Securities and Exchange Board of India (SEBI) for the Motilal Oswal MOSt Shares Nasdaq-100 ETF (MOSt Shares N100), an open ended index ETF, which seeks to track the Nasdaq-100 Index. This will be India's first US Equity based exchange traded fund (ETF), once it is approved by the Indian regulators.
The Nasdaq-100 Index is made up of the 100 largest non-financial companies listed on The Nasdaq Stock Market. The Nasdaq 100-Index is developed and maintained by The Nasdaq OMX Group, the world's largest exchange company.
Nitin Rakesh, MD & CEO of Motilal Oswal AMC said, "MOSt Shares N100 aims to provide Indian investors with a global, diversified, rupee denominated, Indian market hours access to high growth Nasdaq-100 Index companies such as Google, Microsoft, Apple and other leading global companies."
Investing in the ETF does not impact overseas investment limits and is treated at par with all Indian mutual fund investments while trading like a share on Indian stock exchanges.
"Once MOSt Shares N100 is approved by regulators, investors in India will have exposure to one hundred of the world's most innovative non-financial companies," said John Jacobs, Executive Vice President, Nasdaq OMX.
BSNL reduces STD call charges
The state-run Bharat Sanchar Nigam Ltd (BSNL) has slashed landline STD call charges. With this, BSNL's landline STD and local call rates have become same.
BSNL said that the pulse rate of STD calls made from its landline number to any other landline number across India would be increased to three minutes from one minute from 1st December.
Till now it was only in local calls that the pulse rate was three minute, but now this will be extended to all landline connections across India, thus giving people facility to talk more without paying more.
BSNL's fixed line phone subscriber will be able to call any other fixed line networks having less than 10 digit numbers throughout India. Customers will now be able to talk for three minutes in one call unit charge, which varies from 80 paise to Rs1.20 depending upon the tariff plan.
ICICI Securities introduces new brokerage structure for its customers
Active Trader Service (ATS), a specialised service offered by ICICI Securities for active traders, today announced a new brokerage structure for its customers.
ATS, which was launched across multiples cities in India last year, provides specialised research & personalised service, with the aid of latest technology & infrastructure.
"Over the past one year we have seen an increased interest by retail investors in the derivatives segment. There are a lot of retail investors who participate in the markets to benefit from intraday movements in the index and stock options. These actively trading participants form an important segment of the option market," said Mr Ketan Karkhanis, head of Active Trader Service, adding "When a customer trades to benefit from small intraday movements, he needs to keep the transaction costs minimal so as to earn maximum spreads on individual trades."
Recognising this need, ICICI Securities has introduced an innovative order based brokerage structure in the options segment. Under this brokerage structure, for all executed orders in options segment, Rs195 is charged as a fixed brokerage for its customers. This is applicable up to 10 lots and Rs15 per lot thereafter. If only one trade is executed in such order, Rs95 is charged instead of Rs195. This helps the active traders to keep the transaction cost at the minimum and do better spread management.
Tata Motors ties up with United Bank of India for financing commercial vehicles
Tata Motors has entered into an understanding with the United Bank of India for financing its range of commercial vehicles to provide an added facility of finance to its customers.
With this tie-up, the United Bank of India will offer loans for Tata Motors' commercial vehicles to both Existing and New Transport operators up to 90% of the cost of vehicle (including chasis, body,insurance and registration) , for a tenure ranging up to five years, at competitive rates. No collateral security will be required on funding up to Rs10 lakh for cases done under CGTSME.
This facility will be available at all 1,555 branches of the bank and commercial vehicle dealerships of Tata Motors.