Thirty months after Singapore-registered Speak Asia Pte first came under the lens of investigative agencies for allegedly raising money from a large number of people, under the garb of running an online survey company, the Delhi Police on Tuesday arrested one of its masterminds -- Ram Sumiran Pal, 39 (pictured).
Speak Asia, in a little over a year of being set up in 2010, had collected more than Rs 2,000 crore (Rs 20 billion) from some 2.4 million so-called panelists. Shahjahanpur-based Pal, his elder brother Ram Niwas Pal and Speak Asia’s India CEO Manoj Sharma are the main accused in the case.
Investigation teams have been sent to Shahjahanpur to look for the other two.
According to police officials, Pal was held when he came to Delhi to sell off one his properties in the city.
“Ram Sumiran Pal had done his masters in marketing management from Mumbai.
“His brother Ram Niwas was working at a multinational bank in Mumbai.
“After 2008, he started working with his brother and formed companies in association with other partners.
They bought companies registered in other countries.
“In a similar manner, they became part of top management of the company Speak Asia, registered in Singapore, but the company actually had operations only in India,” the Delhi Police said in a press release after the arrest.
Pal’s involvement with Speak Asia had not come to light for long, as the company had named Singapore-based Harender Kaur as its global head.
According to the company’s website, “Speak Asia is owned by a holding company, Podium Ring International Ltd, registered in British Virgin Islands.
SAOL’s online panelists are interacting daily with SAOL through its management, staff and advisors.
“Podium Ring is not in the picture for those interactions.
“The global CEO is Ms Harendar Kaur supported by India CEO Mr Manoj Kumar and the Speak Asia team.” Kaur had even issued a couple of media statements in May 2011 after the company’s Singapore bank froze its accounts following investor complaints.
The move had brought the company to a standstill.
In July 2011, the Economic Offences Wing of the Mumbai Police had arrested Speak Asia COO Tarak Bajpayee and three others after complaints from investors.
Speak Asia enrolled members for Rs 11,000 each (Rs 110 billion).
It worked on the multi-level marketing model, with existing members bringing in new ones. New members were promised spectacular returns, of up to Rs 52,000.
All they needed to do was answering online surveys through questionnaires.
Investigators and regulators found it difficult to proceed initially, as the company had placed itself in a regulatory blindspot.
It said the money it collected was for subscription of an e-zine (electronic magazine). Speak Asia was not registered with any regulatory authority in India.
It had been smartly structured to exploit the gaps in the various financial-sector regulations in the country.
None of the regulators appeared to have any jurisdiction over subscriptions received by an online media company that offered survey as additional benefit.
When the initial investigations began, the company issued a statement, saying: “We have already approached all legal and governmental authorities in India (such as PMO, ministries of finance, corporate affairs and home affairs, besides law enforcement authorities) through official communication for presenting our business, financial and legal framework as our preliminary inquiry is soon to get underway.
“Further, we have engaged the best-of-the-breed organisations in their respective fields, such as legal & IPR, management consulting, PR, legal, tax compliances, marketing communication, training etc.”
Speak Asia officials were not immediately available for comment.
An official from the communication agency it had hired two years ago said it had severed relationship with the company long ago.
Neither the company website nor its advertisement campaigns projected Speak Asia’s interests in online publishing.
All along, it had marketed itself as an ‘earn from home’ online survey company.
The company's financial transactions were also not found to be transparent, as these involved a series of transfers through a complex web of holding companies and subsidiaries.
While money was collected in the name of Speak Asia Singapore Pte Ltd, payments received by the company’s customers were from other group companies like Haren Ventures, etc.
Its website did not give any detail about associate companies or subsidiaries.
The investigative agencies soon realised there were more people and other entities involved in a global internet-based operation that spread as far as Holland and Brazil. Involvement of Pal and others -- along with other entities like Admatrix and Seven Rings International -- who had floated companies in Europe and South America also surfaced.
The agencies, during the course of their investigations, also found out that the surveys were bogus and, unlike Speak Asia executives’ claims, did not have backing of big corporate groups.
Police officials said cases had been registered in several states like Maharashtra, Andhra Pradesh, Madhya Pradesh and Uttar Pradesh.
|THE MODUS OPERANDI|
Image: Ram Sumiran Pal; Photograph Courtesy, Business Standard