SpeakAsia, is an online company collecting large sums of money by rapidly enrolling people with the promise of incredible payments for simply filling out online surveys. Our investigation, however, shows that the company is not registered in India and it cannot show us any legal documentation. Our efforts to get answers through its newly-appointed PR agency led to a threatening call from an agent of SpeakAsia. The company hopes to register one crore agents by the year-end
SpeakAsia (SpeakAsiaonline.com) an online survey company that uses multi-level marketing (MLM) to spread its wings across the country, does not appear to have any legal roots in India. Moneylife has been taking an interest in SpeakAsiaonline.com because its members and agents repeatedly ambush our comments section to hard sell the scheme, claiming to have earned large sums of money by filling out surveys. Consequently, our readers have frequently inquired whether SpeakAsiaonline.com is legitimate and if it will indeed cough up the high returns it promises.
When the company hired LinOpinion Public Relations, a leading PR agency, to handle its communications last week, we took the opportunity to send a list of queries, which were answered by Vivek Gautam, its chief marketing officer (CMO). While the company provided long answers to our questions (reproduced below), it has still not shown us any documentation that it is legally registered in India, or answered whether it requires regulatory clearance from the Reserve Bank of India (RBI) or any other body.
Mr Gautam also sidestepped our question on the company's promoters. In addition, although it claims to be Asia's largest online survey company, it neither provide names of its top management nor addresses or contact details of its offices across the region, except in Singapore. (Read, "Another MLM scam in the happening, this time under the pretext of an online survey"). Moneylife has written to RBI deputy governor, Dr KC Chakrabarty, asking about the company and are awaiting a response.
Here are the responses from Vivek Gautam, of SpeakAsiaonline.com, to questions from Moneylife.
Q1. We have written in the past and even today, we could not find any valid or legal document that shows SpeakAsia as a registered entity in India. Can you tell us about the company's registration?
Ans: The company has a unique business model internationally. The business in a given country is supported by the factoral organisation, in India:
a) Own dedicated sales team. In India they have over 110 sales people. This team is managed by a fortune 500 company in India - Ma Foi.
b) A dedicated 53-man training and knowledge organisation in New Delhi managed by La- Marca.
c) Marketing communication managed by Raceme and Lintas.
d) Customer support both through a call center and a BPO managed by outsourced partner.
e) Technology support is managed by Xorient, an American MNC through its office in Mumbai.
f) The company pays all the taxes, like service tax, in India.
g) Foreign remittances are handled by RBI approved forex agents like ICICI Bank.
i) The company is registered in Singapore and is not required to have a permanent establishment (PE) in India as per prevailing laws.
This level of intense on-the-ground infrastructure is rare in the online industry.
Q2. We would like to know about the founders/promoters of SpeakAsia in India. Can you share their contact details?
Ans: There are no promoters from India.
Q3. Has SpeakAsia obtained any permission from the RBI as the business involves handling foreign currency transactions?
Ans: Foreign remittances are handled by RBI-approved forex dealers ICICI Bank and ING Vysya Bank.
Q4. How does SpeakAsia transfer money from other currencies to Indian rupees and vice-versa into the panelists' account?
Ans: By bank transfer through TT. Indian banks convert the currency once the TT is received by a panelist.
Q5. Has SpeakAsia obtained any permission from SEBI to run a collective investment scheme, which promises assured returns?
Ans: NA (not applicable). It's not an investment scheme. Participation in the company activities earns reward points. No work-No rewards, unlike an investment.
Q6. Are there any legal cases pending against SpeakAsia in Singapore or in India?
Q7. We have written on SpeakAsia in the past and these reports received many comments from readers. Most of the comments were asking people to join the business with the promise to show income. We found it strange and unethical that panelists from a company should post so many comments, that too to spread their business on our site.
Ans: We will send a communication to panelists to desist from such promotion. Though, you will appreciate, we have very little control on independent consumers.
Moneylife's report about SpeakAsiaonline, published on 8 October 2010, continues to attract comments. Interestingly, a large number of them were panelists of SpeakAsiaonline who used our forum to market the service. We have been forced to delete these promotions from time to time.
According to a news report in February 2010, Singapore-based Harendra Kaur, through Haren Technologies, opened up a franchisee for SpeakAsia in India, which became operational from May 2010. Till date, the company claims to have enrolled around 7.5 lakh panelists and has ambitious plans to take this figure to one crore by end-December 2011, the report said.
A web search revealed that litigation has been filed against the company at several places. On 10 March 2011, the city magistrate, Gorakhpur, issued a notice to SpeakAsia for the third time seeking answers to 10 specific questions, it was reported by the Amar Ujala Hindi daily. The magistrate, Jitendra Pratap Singh, has asked the company to provide information about the MLM company's tax liabilities, how they provide money to subscribers at fixed currency rate, whether it has obtained permission from the RBI to conduct such operations, how it converts foreign currency into rupees for Indian subscribers, qualifications required to become a member, how the company maintains its records and the conditions to become a franchisee. What is stunning is that a person by the name of Anurag Nigam, who claimed to be the regional manager of SpeakAsia, could not provide any identification card or visiting card in the court, the newspaper reported.
In another news report published by Amar Ujala on 1 April 2011, Mr Gautam claimed that the company provides services to around 600 companies, including ICICI, Bata, Nestlé and Airtel. We sent mails to ICICI Bank and Bharti Airtel, but till the time of writing the story, there was no reply from them.
Most service provider companies are usually proud to display the names of their clients prominently on their web sites. However, either SpeakAsia is very shy, or it does not want to show off the names of its clients, who spend huge amounts of money on their surveys.
According to information available, SpeakAsia has set up its India offices at Navi Mumbai and Gurgaon. Here again, no information is available about these offices and addresses on the company website.
Although we have written about MLM companies many times in the past, here are a few facts that you need to keep in mind with regard to companies like SpeakAsia online.
1. Why would anyone pay Rs1,000 per week or Rs52,000 a year for a subscription of Rs11,000 per annum for a e-zine? Think for yourself as the owner of a company and answer this-would you pay four times the amount to anyone for his investment (!) in just one year?
2. If the business is so lucrative, why not offer this opportunity to people from other countries as well? How about doing this business in developed regions like the US and European countries? Where people do not get much more than about 3% a year on their investments. With returns as high as over four times their original investment, people from these regions would jump on to the online survey bandwagon. However, this will never happen, because there are very strict laws and punishments for fraud and for duping people in these regions, compared with that in India and Bangladesh. So the 'business' is thriving here and not in the US or even in Singapore, where SpeakAsia claims to be a registered entity.
3. Every agent, sorry, panelist of the company claims to have proof of their income from the surveys. However, what they show you as proof is not a bank statement, but their e-wallet created on the company site. Transferring money from e-wallet into a bank account involves a transaction charge of 3% or $7.5 per payment, whichever is higher.
4. You would rarely find any company doing marketing for its best-selling product. At the same time, you would find a number of offers for products that are not being sold as per expectations. Apply this logic to SpeakAsia, and you will understand why their agents are hell-bent on registering more and more people below their ranks. (BTW: It is called as legs, left and right and the pair is supposed to give the agent 'additional' binary income. The spreading of binary income is always in pyramid shape. The commission is given only on matching pairs, which means that if you have one sub-agent under one leg and two under another leg, you would receive commission only for two sub-agents and not three. In addition, every month, MLM companies 'carry' the stronger leg forward, or in short you miss commission from the leg that has less sub-agents.)
5. "If it looks too good to be true, it usually is." In short, stay away from any company, any scheme that promises you huge or substantial return.
The alternative model of corporate governance will be designed in such a manner that it will suit the needs of Indian companies, SEBI executive director Usha Narayanan said, adding the existing model is closer to international practice
New Delhi: In a bid to bring in greater transparency and enhance accountability of India Inc, market regulator Securities and Exchange Board of India (SEBI) today said it is working on an alternative model of corporate governance, reports.
"A committee is working on it. We have also asked the MCA (ministry of corporate affairs) to broaden the scope of section 55 of Companies Act, 1956, which is now clause 22 of the Companies Bill," SEBI executive director Usha Narayanan said at an Assocham event here.
The alternative model of corporate governance will be designed in such a manner that it will suit the needs of Indian companies, she said adding the existing model is closer to international practice.
Corporate governance is maximising the shareholder value in a corporation while ensuring fairness to all stakeholders, customers, employees, investors, and other stakeholders.
Corporate governance norms for listed and to-be-listed companies should be completely in SEBI's domain, she said.
The Standing Committee on Finance has also recognised the need for the sectoral regulator having more stringent rules than what is contained in the parent Act that governs companies, she added.
Under the present system, unlisted companies are governed by the norms prescribed in the Companies Act, while listed companies follow Clause 49 of SEBI's Listing Agreement.
Regarding jurisdiction on end use of IPO funds, Ms Narayanan said, it is completely in the domain of the MCA as SEBI deals with disclosures.
Besides, she said, the MCA also looks into it through its early warning system and exchanges provide the MCA with quarterly results, as and when required.
Former MCA director Manoj Arora said, "It is above all the responsibility of the shareholders to question whether their money has been duly utilised."
Further, Ms Narayanan said that SEBI is working on creating a unified platform which will enable companies to file their financial reports on just one platform.
"The reports will then be passed on to various exchanges.
Companies would not need to file reports with different exchanges separately," she said.
Upstream regulator Directorate General of Hydrocarbons (DGH) has processed application made by Reliance for transfer of its 30% interest in 23 oil and gas blocks and sent its recommendation to the oil ministry
New Delhi, Apr 13 (PTI) The petroleum ministry has sought security clearance from the home ministry for allowing UK's BP Plc to buy 30% stake in most of the Reliance Industries' (RIL) oil and gas blocks, including the giant KG-D6 off east coast, reports PTI.
Upstream regulator Directorate General of Hydrocarbons (DGH) has processed application made by Reliance for transfer of its 30% interest in 23 oil and gas blocks and sent its recommendation to the oil ministry, an official said.
"DGH had sought some clarifications on the $7.2 billion deal which Reliance has already provided. Now, the petroleum ministry has approached the home ministry for a no-objection," he said.
Europe's second biggest oil company will pay $7.2 billion for 30% stake in 23 out of 26 exploration blocks held by Reliance, besides a performance payment of up to $1.8 billion if the tie-up leads to the development of commercial discoveries.
The official said the home ministry clearance is needed keeping in mind the strategic nature of the exploration and production business.
The home ministry may look into the shareholding pattern and organisational structure of BP besides doing a background check of board of directors and some of the key operational heads of the company before giving its no-objection certificate, he said.
Also, it may look how money is being routed by BP, which had in December last year sold almost all of its exploration and production assets in Pakistan to United Energy Group (UEG) for $775 million.
The official said after the NOC, the oil ministry may accord an in-principle approval to the transaction, after which amendments to the Production Sharing Contracts (PSCs) of the 23 blocks would be done by inducting BP as a partner.
Reliance will retain operatorship of all the 23 blocks.
It is hoping BP will help it reverse the sagging output from Krishna Godavari-D6 gas fields.
Output at KG-D6 fields has fallen from 60.5 million metric standard cubic meters per day (mmscmd) achieved in March last year to around 50 mmscmd currently.
The $7.2 billion Reliance-BP deal is seen as the biggest FDI into India. The other proposed big transaction-Posco's $12 billion investment announced years ago for a steel plant in Orissa-is yet to take off.
Reliance is the operator (with a majority stake) in all the 23 blocks while Canadian Niko Resources and UK's Hardy Oil have minority 10% interest in a few. After the deal, Reliance's holding in the blocks will come down to 60%-70%. As many as 19 out of 23 blocks lie off the east coast while two blocks are onland in Assam and Gujarat.