Despite being the home of software programmers and large scale IT out-sourcing companies, the Indian public has not been exposed to internet sensations, rumours and intrigue to the same extent as countries such as the USA.
Until now.
The online opinion company Speak Asia Online is a Singapore-based company which is now being investigated by Indian authorities for alleged financial fraud and conducting business in India without a licence. Some claim that Speak Asia Online has all the hallmarks of a classic internet Ponzi scheme whilst its supporters claim that it is a legitimate business venture which is being criticised for its own rapid success.
Speak Asia Online claims that it is a legitimate company which pays its’ subscribers a small sum each time they complete an online questionnaire regarding a product or service. Speak Asia Online claims that it is engaged by various companies to conduct market research with Indian households.
Speak Asia Online claims to have attracted nearly two million members in India since it started operations in January 2010. A company statement says it has paid out more than $50 million to survey takers and reported revenue of $80 million in the past nine months.
But there is a catch. Of course there is.
To become a subscriber, you must first pay fees of around Rs10,000 which provides a ‘Surveys Today’ e-zine, an online magazine, for one year and the opportunity to enrol as s panellist. A panellist can be paid up to Rs900 to fill up two surveys of about 12 lines each.
Therefore, after completing around eleven surveys a panellist would start to earn an income from Speak Asia Online. Panellists can also earn money by recruiting other panellists to join and thus receive a commission.
This has left some detractors to conclude that Speak Asia Online is some sort of fraud, scam or Ponzi scheme and should be investigated or shut down by the Indian government. Speak Asia Online protests that it is genuine business and has broken no laws, offering to co-operate with the authorities if need be.
Supporters also point out that they are earning an income from Speak Asia Online as panellists and those complainants should mind their own businesses.
In order to assess whether Speak Asia Online is a genuine business, fraud experts would recommend assessing the following points in relation to Speak Asia Online:
Business model – does the model itself make sense?
This is hard to answer directly. Certainly there are genuine businesses which have operated for decades conducting surveys. But the surveys are focused, relatively small and usually conducted face to face to ensure quality. Speak Asia Online does not follow this path.
People can also earn money by recruiting other subscribers. This has generated a group or recruiters seeking to find new subscribers to continue their income stream.
Analysts have seen this as the trait of a classic Ponzi scheme, sucking in new cash to pay out to earlier subscribers. Speak Asia Online needs to demonstrate that this is not the case.
Does the subscriber need to pay?
Definitely and it is paid upfront. This can be viewed as a definite red flag for a possible scam. It has been noted that Speak Asia Online charges subscribers to be a panellist and receive an e-zine – smartly declining to promise that later payments will be made or else that this is an investment scheme.
Location of the business – does this make sense?
Not at first blush. Though Speak Asia Online is only active in India it has few employees or offices there. Instead, it is a registered company in Singapore. It could be argued that it makes sense for taxation but this doesn’t make business sense.
It has been noted that reporters from Star TV are said to have visited the business address in Singapore and found that there were few people present who claimed they were not involved with Speak Asia Online. This certainly raises more red flag concerns.
Business history – how long has it been running?
Not very long; about 18 months according to the registered documents held by ACRA in Singapore. It should be noted that the business has changed its’ name two times; from Haren Technology Pte Ltd to Pan Automotives Pte Ltd. Neither of these former names suggests that the previous business incarnations were internet based opinion operations.
A cause for concern.
What do the top people of Speak Asia Online say about the business?
Not much and not very convincing.
Speak Asia Online CEO (India) Manoj Kumar claimed during an interview that Speak Asia Online was engaged by ICICI Bank. Following a refutation by ICIICI Bank they there were not a client, Kumar back tracked and said that his earlier claim was a mistake. Kumar allegedly claimed a number of other prominent clients which were later found not to have any relationship with Speak Asia Online. Commentators stated that the CEO ought to know who his own clients are.
At a press conference in Mumbai, Kumar struggled to define exactly what Speak Asia Online does. He denied that they are a direct seller or a company that makes money based on referrals.
Is the company properly regulated?
Not really. It operates in an economic area which has been overlooked so far.
The Indian Direct Selling Association (IDSA) has asked the government to come up with a regulatory framework that will define direct selling, stipulate how it should operate and pass laws to protect consumers.
Meanwhile the Ministry of Corporate Affairs (MCA), Economic Offences Wing, market regulator Sebi and bank regulator Reserve Bank of India are reviewing different aspects of Speak Asia Online’s operations.
What other bad news has Speak Asia Online experienced?
The Singapore bankers of Speak Asia Online, United Overseas Bank, are reported to have declined to continue to be their bankers. Speak Asia Online claimed that they elected to change banks but the confusion suggests that United Overseas Bank no longer wanted to be associated with Speak Asia Online. Does United Overseas Bank know something we don’t?
Speak Asia Online may prove it’s detractors wrong and thrive in a new business sector in the budding Indian market. If it can be more transparent about the operations and exactly who its’ clients are, then it should be able to save the day.
Watch this space.
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