Clarity on Speakasia’s management, ownership and modus operandi remains elusive.
The fate of some 1.9 million Indians who have each invested Rs 11,000 or more is controlled from the small offices of Speakasia Online (SAOL) in Singapore’s Ubi Techpark, where two portholes on each plank of the standard office door offer the only insight into the company’s debatable workings.
Surrounded by a cloud of controversy ever since questions were raised on the company’s ownership and business model, Singapore-registered Speakasia Online has been unable to settle the doubts, which surfaced yet again when the city-state’s United Overseas Bank (UOB) supposedly declined to service its accounts any further.
When this correspondent visited SAOL’s Singapore offices last week to seek clarifications on these issues, after emails to the company went unanswered, requests for an interview with the company’s CEO and chairperson Harendar Kaur were declined, though she was present at the premises.
Less than an hour later, a New Delhi-based public relations company, which SAOL brought on board barely a fortnight ago, reached out to provide possibly the first set of answers about the company’s ownership, management and modus operandi. Complete clarity, however, remains elusive.
OWNERSHIP
The fact that SAOL has changed names thrice in just over three years has attracted attention, but the company said this was done to reflect the nature of businesses undertaken.
According to the record of the Accounting and Corporate Regulatory Authority (Acra) of Singapore, the erstwhile Haren Technology Pte Ltd was renamed Speakasia Online Pte Ltd on January 19, 2010. Before this, the entity, first registered in December 2006, was also known as Pan Automotive Pte Ltd.
“The nature of the business changed, thus the name was changed to suit the current business. The (previous) business was of trading of various products and services but in small scale in the past,” the company said in response to an emailed questionnaire.
At the same time, there has been uncertainty about the actual ownership of Speakasia Online, which although registered in Singapore, generates most of its business from India.
ACRA records say Podium Ring International, with an address in the British Virgin Islands, is the sole shareholder in the company, while Harendar Kaur holds the position of a director and another Singapore citizen, Wong Chuen Shya, is secretary of SAOL.
Despite information on the company’s ownership structure being specifically requested, none was provided.
“As a new media start-up, Speakasia does not have a company registered in India yet, thus, there are no promoters of Speakasia in India. SAOL has appointed staff, consultants and advisors to the company who provide advisory and consultancy services to SAOL with regard to its activities in light of the Indian market scenario. Harendar Kaur is the global CEO and chairperson,” the reply said.
MANAGEMENT
Unusually for a company that reportedly has up to 1.9 million customers in India, it is understood that there are only eight employees at its Singapore offices, not including Kaur. Speakasia did not dispute this headcount.
“The employee count at our existing Singapore office will be augmented very soon when our second office opens. We disclose their details only in line with government rules, as do other Singapore Pte companies,” it said.
In India, while it currently has “appointed staff, consultants and advisors” for “advisory and consultancy services”, SAOL plans to set up an Indian permanent establishment with five zonal offices and a projected employee headcount of 1,750. It has not given any definitive timeline for the establishment of these offices.
“Speakasia does not have its physical office in India. It has global partners for the call centre, support, marketing communications, technology and training. Contact is easily made by panellists using their control panel system and by non-panellists at the portal,” it said.
Last month, the company added, it appointed Manoj Kumar as SAOL’s CEO for India. He is heading a team of 78 sales executives, consultants and advisers.
MODUS OPERANDI
SAOL’s business model has been central to the allegations levelled against it. Bharatiya Janata Party National Secretary Kirit Somaiya, who has publicly spoken out against the company, told Business Standard that “it (SAOL) is nothing but a Ponzi scheme. There is total-non-transparency”.
ACRA records list SAOL’s principal activities as ‘web portals (including social networking sites)’ and ‘infocomm market research’.
On its part, SAOL said it was “creating a panel community of empowered consumers” who earn reward points by participating in company activities such as e-zine (electronic magazine) sales, survey filling, product referrals, advertising-based surveys, etc, all on the company’s website.
“The panellist can use these reward points for purchase of products and services from the website. The company’s business model is also to make profits from product and service sales. However, the company bears the cost of utilisation of the reward points, for purchase of products and services at the website. In simple terms, our panellist community earns and burns reward points on the SAOL portal,” the company said.
SAOL added that the left-over reward points could be encashed on request. “All cash requests are processed through the bank and money is sent from Singapore to respective banks through TT (telegraphic transfer),” it explained.
The company, however, continues to be unable to establish its revenue stream accurately, although it lists “precision marketing” as a domain of functioning where it engages in “filtered/narrow casting of marketing and sales-related services.”
“Speakasia gets research done ‘on’ and ‘for’ different companies, products and services. Panellists earn reward points for participating with their focused and valuable opinion in the surveys,” it further said, without naming any specific company that it has worked for.
Although SAOL had earlier reportedly named companies, including ICICI Bank, Bata, Nestle and Bharti Airtel, as its clients, it subsequently backtracked.
E-ZINE
Interestingly, the company, in its defence, prominently says it “does not run a collective investment scheme”.
It claims that “panellists may choose to participate in training; they may promote sales of the ‘Surveys Today’ e-zine, work on the website, buy and refer products and services. This does not fall into the category of investment scheme.”
The company’s website, though, explains that an individual can “remain a panellist and earn reward points from Speakasia only as long as your e-zine subscription to E-Bulletin is in force.” The website’s homepage also makes clear that subscribing to ‘Surveys Today’ e-zine is required for participation in surveys.
But SAOL in its replies has failed to make explicit the role of the e-zine, which it said is globally distributed by Haren Ventures Pte Ltd (HVP).
“The e-zine global distributors are HVP and the subscription money of the panellists goes to HVP,” it stated.
Notably, according to Acra records, Haren Ventures Pte Ltd, formerly known as Haren Auto Parts Pte Ltd, is owned by Harendar Kaur, SAOL’s CEO. Its listed principal activities are ‘business and management consultancy services’ and ‘general wholesale trade (including general importers and exporters)’.
Critics such as Somaiya have questioned this aspect of the business. “How can anyone give Rs 1,000 per week or Rs 52,000 a year for a subscription of Rs 11,000 per annum for an e-zine? Would anyone pay four times the amount to anyone for his investment (!) in just one year?” he has written in a letter to the finance minister, a copy of which is available on his website.
INVESTIGATIONS
Despite media reports indicating the contrary, SAOL said till date (as of June 2, 2011) it “has not been contacted by any of the government departments.” The company also maintains that it has “not breached any provisions of Indian law, RBI, Sebi, or any other government authority”.
While any investigation will further damage SAOL’s seemingly fragile standing, the repercussions of the question on its credibility are already showing on the company that has thrived on mass membership.
SAOL admitted that “business has been impacted and the company is trying to resolve the current situation.”
There may lie its biggest challenge. Regaining trust will be difficult, even if it is able to silence its doubters for now.
