Amidst the usual news grabbers of politics, crime and page 3 shenanigans, the controversy surrounding online survey company Speak Asia (SA) comes across as rather unusual. Let us look at the issue in detail:
Issue:
SAOL is an online survey company, where people can enlist further to a registration fee of Rupees Eleven Thousand ( Rs. 11,000/-). The now registered member can "earn" back his registration fee and subsequent amounts by participating in surveys of clients that SAOL claims its has. The member can further get a percentage of fees paid by other members that he/she refers to SAOL. The controversy as "exposed" by a leading news channel, accuses Speak Asia of making fraudulent claims. The news channel claimed that SAOL had falsely made claims in regards to its list of Clientele and the fact that SAOL does not have any management present in India. Kirit Somaiya, the founder of the Investor's Grievance Forum has taken action against SAOL by filing various complaints against SAOL.
Verdict:
Experts are varied in their opinion whether or not SAOL is a scam in the manner of a PONZI scheme. While the allegations made by said channel hold water, it is my opinion that a critical ingredient of SAOL's operations have been overlooked. The Prize Chit Funds Money Circulation Schemes Banning Act, 1978 elaborates what can be hypothesized to be the operations of SAOL.
S. 2(a) of the said Act defines "chit fund" as: "conventional chit" means a transaction whether called chit, chit fund, kuri or by any other name by or under which a person responsible for the conduct of the chit enters into an agreement with a specified number of persons that every one of them shall subscribe a certain sum of money (or certain quantity of grain instead) by way of periodical instalments for a definite period and that each such sub- scriber shall, in his turn, as determined by lot or by auction or by tender or in such other manner as may be provided for in the chit agreement, be entitled to a prize amount"
S. 2(c) of the said Act defines "money circulation scheme": "money circulation scheme" means any scheme, by whatever name called, for the making of quick or easy money, or for the receipt of any money or valuable thing as the consideration for a promise to pay money, on any event or contingency relative or applicable to the enrollment of members into the scheme, whether or not such money or thing is derived from the entrance money of the members of such scheme or periodical subscriptions.
A collation of the above sections, clearly categorize the operations of SAOL under this Act, and therefore make them liable under the same.
Do let me have your thoughts: vkopikar@gmail.com
until next time
Vikram K
S. 2(a) of the said Act defines "chit fund" as: "conventional chit" means a transaction whether called chit, chit fund, kuri or by any other name by or under which a person responsible for the conduct of the chit enters into an agreement with a specified number of persons that every one of them shall subscribe a certain sum of money (or certain quantity of grain instead) by way of periodical instalments for a definite period and that each such sub- scriber shall, in his turn, as determined by lot or by auction or by tender or in such other manner as may be provided for in the chit agreement, be entitled to a prize amount"
S. 2(c) of the said Act defines "money circulation scheme": "money circulation scheme" means any scheme, by whatever name called, for the making of quick or easy money, or for the receipt of any money or valuable thing as the consideration for a promise to pay money, on any event or contingency relative or applicable to the enrollment of members into the scheme, whether or not such money or thing is derived from the entrance money of the members of such scheme or periodical subscriptions.
A collation of the above sections, clearly categorize the operations of SAOL under this Act, and therefore make them liable under the same.
Do let me have your thoughts: vkopikar@gmail.com
until next time
Vikram K
Hi Vikram, Speak Asia is not registered in India and they are operating online. I think the most important question here is whether Indian laws would apply in this case?
ReplyDeleteRegards,
Pooja