However, authorities in India have not seen SpeakAsia's business as legitimate. One, the company is registered outside of India, and two, in the past there have been many cases of companies luring people into easy investments and then duping them of their money.
According to a report in the Outlook magazine, there are nearly 600 unregistered multi-level marketing (MLM) schemes in India and frauds involving Rs 2 lakh crore to date have taken place in India. Besides SpeakAsia, companies like PACL, TVI Express, GoldQuest, Questnet, and Qnet have been busted by the Indian authorities.
Examples like this led leaders like Kirit Somaiya, president of Investor Grievance Forum (IGF), to lodge a written complaint against Speak Asia Online Ltd with the EOW of the Mumbai Police. In his complaint, he had asked EOW to initiate inquiry against the company SpeakAsia, with an allegation of dubious modus operandi in India.
In July 2011, India's Corporate Affairs Ministry asked the Registar of Companies to inspect the books of accounts of Speak Asia and submit its report to the government by July 10.
Fraud or innovation?
First, Sharma says the figure of Rs. 2,276 crores spelled out in media reports is not right. "As per the charge sheet and our bank statement a total of 722 crore was remitted from India," he says. "And a total of 714 crore was sent to India. This was for earnings of panellists and other costs. In a nutshell, a mere 8 crore has been net outflow from India."
Mumbai Police, in their charge sheet, however, have quoted the figure of Rs. 2276 crores (US$ 368 million) being swindled in the SpeakAsia case.
According to Sharma, SpeakAsia's business model can't be understood without understating concepts like global e-commerce, customer aggregation, social media, and factoral organisation.
"SpeakAsia adopted a business model wherein it first acquired a captive consumer base and then approached various vendors for transacting the business," says Sharma.
SpeakAsia is a 100% owned company by a PE firm called Podium Rings International, which is based out of the British Virgin Islands. Harendar Kaur is the director responsible for management of the operations of the company on a day to day basis. Wong Chuen Shya is the secretary, according to ACRA documents. Both are citizens of Singapore.
When asked why the company was registered in the British Virgin Islands, he says: "Podium Rings is the holding company which owns the shares of Speak Asia Online Pte Ltd, Singapore. Podium Rings is registered in British Virgin Island as it is a neutral country with clear tax laws and structure. Since we are a new generation factoral organisation, the shares of SpeakAsia will get owned by suppliers, manufacturers, service providers, consumers and employees. Podium Rings is just a custodian. Harendar Kaur or Myself or any of our family members or companies don't own any share in SpeakAsia."
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