The India Chief Operating Officer (COO) of Singapore-based online consumer survey company SpeakAsia Online, Mr Tarak Bajpai, and three of his colleagues, were arrested on Friday by the economic offences wing of the Mumbai Police. Mr Bajpai was arrested in Indore and brought to Mumbai.

The police are investigating a possible multi-crore fraud by the company, which has empanelled consumers in India ostensibly for online research since 2010, for which they need to pay Rs 11,000 a year.

In turn, each consumer will get to fill two surveys a week, and receive a payment of Rs 500 a survey, paid into their “e-wallet” via bank transfer from Singapore. This is then credited into the consumers' bank accounts. Under an incentive-based MLM (Multi-level Marketing) scheme, SpeakAsia encouraged consumers to recruit more consumers, increasing their return with every additional consumer under them.

Consumer Complaints

The arrest follows a complaint lodged by a Mumbai-based consumer empanelled with SpeakAsia, alleging that while his e-wallet showed a balance of Rs 6 lakh, this was not credited into his bank account. Business Line spoke with other consumers who had also invested in SpeakAsia's scheme, with some even investing over Rs 1 lakh, with the lure of getting back a guaranteed Rs 45,000 a month. Several of them allege non-payment by the company in the last three months.

Briefing media on the arrest, Mr Himanshu Roy, Joint Commissioner of Police (Crime), said, “The complainant was induced to make a ‘tripod' (three members under him), under the MLM scheme, to get more returns. You are then tempted to make tripods under those tripods. The complainant claims to have lost Rs 6 lakh.”

Mr Roy invited other investors, if any, to come forward and place complaints if they had not received payments from SpeakAsia.

Speak Asia is yet to be registered as a company in India. It announced that it would do so in August, with an office in Mumbai, while insisting that it did not have a legal requirement according to Indian laws. The arrests follow the Criminal Investigation Department freezing the company's bank accounts in India this week. The company has several cases filed against it in different parts of the country.

Talking to Business Line , SpeakAsia claimed in April that its research is bought by large clients across the world – and it is those funds that are used to pay its empanelled consumers.

Singapore national and Chairman of the company, Ms Haren Kaur, and the firm's India CEO, Mr Manoj Kumar Sharma, have been shown as wanted in the case, informed Mr Roy.

At Rs 11,000 a consumer and over 11 lakh consumers, the scale of the scam being investigated is over Rs 1,200 crore.

Changing Tack

Of late, SpeakAsia has moved to a tagline of “Consumer Empowerment” from “Values Your Opinion,” suggesting that it will use its large base of 11.2 lakh consumers (it claimed as of March 2011) to create group buying advantage. A brand called “Yug” – covering televisions to toasters in electronics – is being advertised on the company's Web site. In an advertisement released on Wednesday, the company said, “In the coming times we are pushing towards creating a global online market driven by SpeakAsians.”

It also hosted a GenX Bazaar in Goa this May, where it said it would bring together companies selling goods ranging from automobiles to jewellery and the “top performing” SpeakAsians. They could pay through their e-wallets to make the down payment. How the bazaar fared is not known, but the CMO Mr Vivek Gautam (who resigned in May) had said that the GenX Bazaar was the first step towards creating a “panel of empowered consumers.”

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