New Delhi: The recent stir over Speak Asia Online, a survey group that seemed to be offering easy money to close to two million Indians, has caught the attention of the ministry of corporate affairs (MCA). The government said it’s investigating Speak Asia after news channel Headlines Today alleged fraud by the firm.
“It is too soon to come to any conclusion regarding the alleged fraud,” said D.K. Mittal, secretary, MCA. “However, we are now working closely with RBI (Reserve Bank of India) and Sebi (Securities and Exchange Board of India) and investigating.”
Mittal declined to comment on how Speak Asia got its India licence.
However, a senior official at the survey group said: “Currently we are only regulated by Singapore. We had written a letter to RBI while setting up shop in India and we were given to understand that we needn’t fulfil any other requirement.”
Speak Asia made its application through a bank, the official said.
According to the senior official, Speak Asia did not seek the approval of the Registrar of Companies while setting up operations in India and also did not obtain the approval of the Foreign Investment Promotion Board, which is necessary for any overseas company establishing a business in the country. According to Speak Asia, the company does not fall under the purview of the two agencies.
As for its Singapore status, parent Speak Asia Online Pte Ltd is listed as “non-compliant” by the Accounting and Corporate Regulatory Authority of the island nation.
This was because of a delay in submitting documentation, said Manoj Kumar, chief executive officer of Speak Asia India.
“We are compliant with all laws of Singapore and there is no case pending against us or our top management, either in India or in any other country. In the case of accreditation and compliances, the company is currently rated ‘non-compliant’. This is due to a delay of about 10 days in providing our minutes of the AGM (annual general meeting) for the last accreditation cycle. Our financial year ends on 31 May and we will be able to fulfil even this compliance requirement soon,” Kumar said.
Speak Asia Online, a marketing services firm based in Singapore, works on a multi-level marketing (MLM) model that rewards its members on taking surveys and referring more members to take them. However, Speak Asia said it was not an MLM firm and didn’t identify itself as a direct selling company either.
“In the case of Speak Asia, consumers’ earnings are not dependent only on adding more people, but also on the services they provide in the company’s other marketing service activities,” Kumar said. “An MLM company would make it compulsory for its members to recruit other people in order to earn. Which is why only 3-5% of people enrolled in any MLM company actually make money.”
Speak Asia has no direct clients for which it conducts surveys. A senior official at the survey group refused to divulge details of direct clients and said a major portion of the business came from aggregate panellists.
Currently, Speak Asia has close to two million members in India and since January 2010, when it started services, has clocked a revenue of $80.5 million (Rs 360 crore today) over the last three quarters. According to a press release, 1.2 million panellists have received over $52 million over this period through bank transfers via RBI-authorized foreign exchange channels.
This income has been generated by the filling up of surveys, giving online opinions on advertisements watched and income accrued from referring other panellists. The company has till date invested over $9 million in various marketing, training and business development programmes.