Moneylife Foundation urges the PM and others to completely ban MLM companies in India or bring these companies under the regulation of either RBI or SEBI. Moneylife was the first to expose the Speak Asia online survey scam on 8 October 2010
Moneylife Foundation has been writing against multi-level marketing schemes for some time now. Following the exposé by Moneylife on Speak Asia Online Pte Ltd and its multi-level marketing schemes, Moneylife Foundation has sent a representation to prime minister Dr Manmohan Singh, finance minister Pranab Mukherjee, finance secretary Sushama Nath and Reserve Bank of India (RBI) governor D Subbarao urging them to ban all MLM companies and their schemes in the country, or to bring all MLM companies under the regulation of either the RBI or the Securities and Exchange Board of India (SEBI), to stop them ensnaring gullible people.
According to Moneylife Foundation trustees, while the investor population in the country has fallen to 80 lakh, Speak Asia has managed to lure nearly 19 lakh people into its get-rich-quick scheme. The number accounts for a sizeable portion of India's investor population as well as internet users.
Speak Asia requires its members or 'panellists' to deposit Rs11,000 (though the rates vary, as we have seen in the countless posts by agents of Speak Asia on various sites) and then conduct surveys for which the company pays Rs500 per panellist per survey. A panellist gets an added commission if he recruits new members. There is no guarantee as to who will return the money if the company collapses.
It claimed to have conducted surveys for companies like ICICI Bank, Bharti Airtel, Nestle and Bata, but all these institutions have denied their association with Speak Asia. At a press conference held in Mumbai on 16th May, Speak Asia formally apologised for using the names of these companies. But it also refused to name a single client.
Singapore-based Speak Asia was previously known as Haren Technology Pte Ltd and is owned by one Ms Harinder Kaur. The Accounting and Corporate Regulatory Authority (ACRA) of Singapore has given it a non-compliant rating on the ACRA website for not submitting details of its AGM (annual general meeting), annual returns report and other documents.
Haren Technology itself has frequently changed its garb. The company doesn't have a registered address in India. Despite its claims of being the biggest online survey company in Asia, Speak Asia's reach is limited only to India and Bangladesh. It claims to be in existence since 2006, but the website was actually launched only on 21 January 2010.
Speak Asia's tall claims have been busted by Moneylife, and also exposed by The Economic Times, Star News and Aaj Tak. SpeakAsia's panellists have been arrested in Bangladesh. Lot of articles are available online on the fraudulent nature of the company.
Unlike several other countries, MLM schemes are not banned in India. Hence, schemes like City Limousine, Stockguru and GoldQuest could escape with millions. None of the financial watchdogs in India are responsible for monitoring such schemes, so there is every chance that Speak Asia and its clones like Ram Survey and FLC Online can get away after cheating millions of their savings.
Moneylife Foundation hopes that the government recognises the danger such schemes pose and bans them outright, and also put a regulator in charge to monitor such companies and their activities.
The court was hearing a petition filed by NSE seeking directions to the competition watchdog to provide full details and reasons behind the notice which asked as to why penalty should not be imposed on it for allegedly abusing its dominant position
New Delhi: The Delhi High Court today asked the Competition Commission of India (CCI) to give a copy of its order to the National Stock Exchange (NSE) on the basis of which a show-cause notice for penalty was issued to the bourse for allegedly abusing its dominant position, reports PTI.
"The CCI has to furnish the petitioner any order forming the basis of penalty show-cause notice. On principle of natural justice CCI is directed to furnish a copy of order dated 29th April within one week," justice S Muralidhar said.
The court was hearing a petition filed by NSE seeking directions to the competition watchdog to provide full details and reasons behind the notice which asked as to why penalty should not be imposed on it for allegedly abusing its dominant position.
The CCI notice followed its internal investigations after complaint filed by NSE's rival in currency derivative market, Multi Commodities Exchange Stock Exchange (MCX-SX).
The complaint had alleged that NSE substantially reduced transaction fees to eliminate competition and discourage other entities from entering the market.
NSE had moved the high court contending that the notice did not give reasons as to how CCI reached the conclusion of penalty.
After hearing counsels for NSE, CCI and MCX-SX the bench said, "Any material which is going to be used against him (NSE) has to be given to him. It is simple principle of natural justice.
"In arriving to the penalty show-cause notice you had some order. What is the problem? Give NSE a copy of that," the judge said.
CCI's issued the penalty show cause notice after its director general investigation found prima facie that NSE allegedly violated the Competition Act, specifically section 4, which relates to "abuse of dominant position".
CCI had then asked NSE to show cause as to why a penalty should not be imposed on it for unfair trade practices in connection with currency derivatives trading.
It had sent the notice recently to NSE before deciding on the quantum of fine to be imposed on the bourse.
MCX-SX had alleged in its complaint to CCI that NSE used its dominant position and original monopoly in equity, F&O (Future and Options) and WDM (Wholesale Debt Market) markets to protect its position in the currency derivative (CD) market.
Currency futures trading started on the NSE on 29 August 2008, and at the MCX-SX on 7 October 2008.
While MCX-SX is allowed to trade only in currency derivatives, NSE has presence in all major financial trading segments.
Nifty headed for the first support of 5,340, subject to a minor rally
The market opened with small gains taking cues from the Asian bourses which were up in morning trade. The Sensex opened 40 points higher at 18,177 and the Nifty added nine points to its previous close to resume trade at 5,448. The indices rose to their intra-day highs in initial trade, with the Sensex at 18,218 and the Nifty at 5,461. The market could not retain the gains and hovered near the neutral line in the absence of any triggers. A bout of selling in frontline stocks around noon pushed the indices lower.
The oil & gas sector was the top loser, following reports of a directive from the oil ministry asking Reliance Industries to drill two wells in the KG-D6 block by next month and another nine by the end of the fiscal, to raise gas output. Higher crude prices also weighed on the sector.
The market touched the day's low in noon trade, with the Sensex losing 116 points to 18,021 and the Nifty dropping 38 points to 5,401. Recovery attempts in the post-noon session were shot down by institutional sellers, which ensured that the indices stayed range-bound in the negative. The market restricted its losses today, but still ended in the red for the third straight day. The Sensex closed 51 points down at 18,086 and the Nifty shed 18 points to settle at 5,421. The advance-decline ratio on the National Stock Exchange was 425:968.
The Nifty fell below its first support of 5,450 today. The fall is acquiring strength now and the next support to watch is 5,340.
The broader markets took a bigger hit today as the BSE Mid-cap index ended 0.61% lower and the BSE Small-cap index declined 0.80%.
The BSE Oil & Gas index (down 1.88%) continued to languish as the top sectoral loser. Other losers were BSE PSU (down 1.77%), BSE Healthcare (down 1.40%), BSE Auto (down 0.98%) and BSE Realty (down 0.92%). The BSE IT (up 0.24%), BSE Fast Moving Consumer Goods (up 0.20%) and BSE TECk (up 0.12%) were gainers.
Among Sensex stocks, HDFC (up 2.34%), Hero Honda (up 1.93%), Maruti Suzuki (up 1.75%), Wipro (up 1.71%) and Tata Power (up 1.50%) were the top performers. Reliance Infrastructure (down 4.11%), Tata Motors (down 3.36%), Reliance Communications (down 3.31%), SBI (down 2.40%) and Jaiprakash Associates (down 2.23%) were the losers on the index.
The government has decided to include natural gas and fertilisers in the list of core sector infrastructure industries, a move that will help capture the performance of the economy in a better manner.
Currently, the government evaluates the performance of six key sectors-crude oil, petroleum refinery, cement, electricity, finished steel and coal-on a monthly basis. The new series, which will have data for eight key sectors, would be released on 10th June.
Markets in Asia closed higher on a weak dollar and strengthening of commodity prices. Japanese stocks advanced on the back of banks and utilities. Mizuho Financial Group Inc gained 3.2% in Tokyo, on reports that it plans to merge its retail and corporate banks. Cnooc, China's biggest offshore oil producer, gained 2.2% in Hong Kong, while PetroChina Co climbed 1.7% as crude futures rose as much as 1.1% from a three-month low in New York today.
Besides, China's annual housing inflation slowed slightly in April with prices rising 4.3%, a further sign that forceful policy tightening is helping to cool exuberant price rises.
The Shanghai Composite gained 0.70%, the Hang Seng rose 0.48%, the Jakarta Composite surged 1.08%, the KLSE Composite was up 0.33%, the Nikkei 225 advanced 0.99%, the Straits Times added 0.15%, the Seoul Composite jumped 1.59% and the Taiwan Weighted settled 0.68% higher.
Back home, institutional investors were net sellers of equities on Tuesday. Foreign institutional investors offloaded Rs487.20 crore and domestic institutional investors pulled out stocks worth Rs570.29 crore.