Regulations
SEBI Puts the Squeeze on Royal Twinkle
But what happens to Citrus Check Inn? 
 
The Securities & Exchange Board of India (SEBI) has issued another decisive order against Royal Twinkle Star Club, a massive collective investment scheme (CIS), which has been luring people with the promise of high returns. Moneylife has been tracking Royal Twinkle for over a year. While SEBI’s reiteration of its 2014 notice to Royal Twinkle is welcome, it would appear that this is still half an order and may require quick further action to really protect investors.
 
SEBI’s order of 21st August was made public through a press release on 25th August. It has asked Royal Twinkle and its directors—Omprakash Basantlal Goenka, Prakash Ganpat Utekar, Venkatraman Natrajan and Narayan Shivram Kotnis—to wind up its existing CIS and refund the money collected from investors within three months. Royal Twinkle has also been asked to submit a winding up and repayment report to SEBI, including the trail of funds claimed to be refunded, bank account statements indicating refund to the investors, and receipts from the investors acknowledging refunds. The promoters have been told not to alienate or dispose off or sell any of the assets of Royal Twinkle except to make refunds to investors and to provide a full inventory of all their assets and properties and details of all their bank accounts, demat accounts and holdings of shares/securities, if held in physical form.
 
Interestingly, on 6 March 2014, Moneylife’s website wrote that Royal Twinkle had simply changed its name to Citrus Check Inn and was continuing to collect funds. Earlier, on 3rd March, we had written to SEBI to alert it that Royal Twinkle had changed its name to Citrus Check Inn. SEBI’s 2014 action followed immediately thereafter but made no mention of Citrus Check Inn. This order does not mention it either. However, on 3 June 2015, in a separate order, SEBI barred the promoters of Citrus Check Inn from raising funds from the public. It said that Citrus had collected over Rs777 crore from investors through its various holiday plans which were really nothing more than a collective investment scheme. 
 
Action against Citrus Check Inn is at the first stage and the company is likely to appeal SEBI’s orders. Moneylife will continue to track this through investor feedback.
 
Royal Twinkle claimed to have 234,000 rooms across the country and had raised Rs668 crore from nearly 370,000 people by 2014. In this respect, Royal Twinkle is vastly different from Sahara and Alchemist, who seem to have funds, but are hard pressed to establish their existence and identity. Both, Royal Twinkle and Citrus Inn, have been specifically targeting less financially literate persons such as drivers, domestic helpers, small traders and vendors across Mumbai.
 
SEBI’s interim order of 2014 is more or less similar to its order of 21 August 2015 barring Royal Twinkle from collecting funds. That order noted that, although the company claimed to sell holiday plans, a majority of investors were attracted by its offer of high assured returns and less than 2% had availed the so-called holiday packages.
 
This amounts to ‘illegal deposit mobilisation’ with “guaranteed returns of 1.5 times in 4 years, 1.7 times the investment in 5 years, double in 6.5 years and 3 times in 9 years.” Moneylife had pointed out, in 2014, that some investors misunderstood the plan as a recurring deposit and had paid Rs500 every month into the scheme. Some others claimed that they were promised returns of 13% to 14%. One agent posted a complaint on a website that Citrus Inn sold its plans variously—as a recurring deposit, fixed deposit or a pension plan and money back term plan—in fact, whatever it took to lure the investor. 
 
In Royal Twinkle’s case, as soon as SEBI’s latest order uploaded on our website (on 25th August), worried investors began to ask how they should apply for a refund. SEBI will help and reassure people if it allows investors to write directly to the regulator in order to seek refunds. This will help it verify the number of investors as well as track whether Royal Twinkle has actually refunded the money. Interestingly, the money collected from Royal Twinkle investors is apparently funding some popular fast-food chains in Mumbai. 

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COMMENTS

Srikanth Shankar Matrubai

11 months ago

Can you please update the latest on Neesa Leisure Ltd's FD default issue?
The company is very careless.
not responding to emails, no one is answering calls...

Pramod B Patil

1 year ago

Thanks for information.

Gandhali Girme

1 year ago

Thanks Maam for this article ..Why are you not getting the govts action on company deposits who have defaulted since last 2 yrs ..Neesa Leisure Ltd, Neesa Technologies Ltd ( SEBI has already issued a show cause cum interim order) , Helios ,Unitech, Plethico Pharma, Tricom India Ltd, Phadnis Group Pune...I have send you a detailed note also to that effect ..Do u want more info ? can share..Help us reach Govt through your help

The Tiger Mom Tax: Asians Are Nearly Twice as Likely to Get a Higher Price from Princeton Review
One unexpected effect of the company’s geographic approach to pricing is that Asians are almost twice as likely to be offered a higher price than non-Asians, an analysis by ProPublica shows
 
Read our methodology.
 
Every year, thousands of high school students get ready for the SAT (a general test of verbal and quantitative reasoning accepted for US college admissions) by using The Princeton Review’s test preparation services.
 
But few, if any, realize that the prices for The Princeton Review’s online SAT tutoring packages vary substantially depending on where customers live. If they type some ZIP codes into the company’s website, they are offered The Princeton Review’s Premier course for as little as $6,600. For other ZIP codes, the same course costs as much as $8,400. 
 
One unexpected effect of the company’s geographic approach to pricing is that Asians are almost twice as likely to be offered a higher price as compared to non-Asians, an analysis by ProPublica shows. 
 
The gap remains even for Asians in lower income neighborhoods. Consider a ZIP code in Flushing, a neighborhood in Queens, New York. Asians make up 70.5 percent of the population in this ZIP code. According to the U.S. Census, the median household income in the ZIP code, $41,884, is lower than most, yet The Princeton Review customers there are quoted the highest price.
 
The Princeton Review said in a statement that its pricing is based on the “costs of running our business and the competitive attributes of the given market,” and that the company charges the same price everywhere in New York City. Although the test prep service markets its service as “24-hr Online Tutoring,” the company says the tutoring is done in one-on-one sessions in person or online and that the tutors typically live in the same areas as their students.
 
“The areas that experience higher prices will also have a disproportionately higher population of members of the financial services industry, people who tend to vote Democratic, journalists and any other group that is more heavily concentrated in areas like New York City,” The Princeton Review’s statement said
 
These types of price differences are not illegal, and the consequences are not intentional, but researchers say they are likely to become more common in the age of services like Uber, which set prices by computer algorithms. The Princeton Review says its prices are simply determined by geographic region.
 
Last year, a White House report on “Big Data” cautioned that the “algorithmic decisions raise the specter of ‘redlining’ in the digital economy – the potential to discriminate against the most vulnerable classes of our society under the guise of neutral algorithms.”
 
In 2012, the Wall Street Journal reported that the online office retailer Staples was varying prices by ZIP code. Staples appeared to be calculating prices based on the user’s distance from a rival store, but the inadvertent effect was that people in lower-income ZIP codes saw the higher prices. 
 
In 2014, researchers at Northeastern University found that top Web sites, such as Home Depot, Orbitz and Travelocity, were steering some users toward more expensive products. And this year, another study found that users who were identified by Google as female received fewer ads for a high-paying job.
 
Offline, the practice of offering different prices for the same product in different places is fairly common – gasoline or a gallon of milk can be priced differently just a few blocks apart. But as long as there is no intent to racially discriminate, it is generally legal, says Andrew Selbst, an attorney who co-authored a paper on the biases that can be inherent in Big Data
 
“If you are open for business, you can’t discriminate against certain protected classes,” Selbst said. 
 
Unintentional racial discrimination is illegal in housing and employment under the legal doctrine known as “disparate impact,” which prohibits inadvertent actions that hurt people in a protected class. 
 
But the disparate impact doctrine does not apply to the online world, where it’s often difficult to determine how and why different prices are being offered. 
 
Earlier this year, Harvard undergraduate Christian Haigh stumbled on The Princeton Review’s variable prices doing research for a class he was taking called “Data Science to Save the World.” 
 
Haigh had been looking for price differences in hotel rooms if he booked from different locations around the world. But he wasn’t finding much. So he looked for websites that required entering a ZIP code.
 
“We thought maybe if you have to put in the ZIP code, they were trying to discriminate,” Haigh said. Today, Haigh and three fellow students are publishing their findings that The Princeton Review’s higher prices correlate to areas with higher income. 
 
ProPublica reviewed the code that one of Haigh’s fellow students posted on a public web site and collected its own data in July, and again on Monday. The data showed that The Princeton Review offered four different prices for the same “Premier Level” online tutoring package.
 
Many of the prices are regional. For instance, the entire New York City area, including Long Island, receives the highest possible price, $8,400. Much of California, except San Diego, is offered the second-highest price, $7,200, while ZIP codes in San Diego are charged the lowest price.
 
Because the pricing regions are large… Continue Reading…
 
Courtesy: ProPublica
 

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COMMENTS

Ralph Rau

1 year ago

If one on one tutorials are involved this will require hiring premises - the rentals of which will be affected by location or pin code ?

Smoking Out E-cigarette Ad Claims
TINA.org review of more than 150 e-cigarette sites finds a wide variety of questionable claims
 
If you are searching for electronic cigarettes online, be wary. A TINA.org review of more than 150 websites found a host of questionable claims being made on numerous sites that show up in a routine Google search for e-cigarette companies.
 
It’s been more than a year since the FDA signaled it was going to regulate e-cigarettes. But while the agency works on specific regulations — including banning sales to underage youth — many online e-cigarette companies are taking advantage of the regulatory gap to market their wares with a variety of suspect claims. The most frequent? Half of the sites reviewed note a health benefit, such as that e-cigarettes are safe, and/or a healthier alternative to traditional cigarettes, even though the FDA currently maintains that the risks associated with e-cigarettes have not been fully studied and some key reports have found harmful chemicals.
 
Further, while the FDA has not approved any e-cigarette as a smoking cessation therapy, TINA.org’s review also found that almost one-third of sites indicated in some way that vaping products can help smokers quit tobacco. Other questionable claims include that the products can be smoked anywhere and are cheaper. About two-thirds of the sites reviewed made one or more of these claims and 40 percent made three or more of the claims. (See infographic.)
 
The claims come in varied forms, such as in blogs, social media, testimonials, links to studies or media reports displayed on the sites. Some are blatant while others are subtle, craftily-drafted veiled claims. TINA.org’s database and criteria for those highlighted as questionable can be found here
 

Expanding market

E-cigarettes are battery-operated electronic nicotine delivery systems (ENDS) that contain flavored liquid solutions (e-liquids or e-juice) that are vaporized and inhaled as an aerosol mist. Nicotine content varies depending on the product.
 
The industry has been rapidly expanding since the products were first introduced in 2007 and it is now estimated to be a $1.5 billion market. There are now more than 460 brands of e-cigarettes and more than 7,000 flavors of e-liquids. And with the growth has come a rapid rise in e-cigarette advertising, which jumped more than 1,200 percent between 2011 and 2013. The marketing has yielded significant results. E-cigarette use among adults more than doubled between 2010 and 2013, and teen use of e-cigarettes nationwide surpassed the use of tobacco cigarettes in 2014.
 

Safety in question

Last year, a TINA.org review of about 600 complaints filed with the FTC about e-cigarette companies found that a majority were from consumers who said they responded to offers of free trials but were instead repeatedly charged for monthly supplies they didn’t want and had difficulty canceling. Continue Reading…
 

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COMMENTS

Bee

1 year ago

England Public Health released an independent study that shows how safe e-cigarettes are and how effective they could be for smoking cessation. All the FDA people that brought the lawsuit to ban e-cigarettes in 2009 are now gone. Those that didn't leave on their own accord were fired for conflict of interest. Tom Frieden of the CDC along with his lab monkey UCSF Stan Glantz should go and retire. The American public shouldn't have to wait until 2016 for Tom to leave. The long running and well funded demonizing campaign at this point is going to kill people.

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