AML/CFT: Speak Asia may be told to shut up

A series of reports in the Indian media referring to the company say that its problems really began to mount in the middle of the year when several of its senior officers in India were detained for questioning over allegations that it was failing to honour payments and "reward points" that fell due to people working for it.

But that was compounded within the past month when more senior employees were, local media reports, questioned over allegations that the company had remitted some 9,000,000 rupees (about GBP110,000) to Singapore. The allegation as reported in local media is that the money was "disguised as remittances."

But the Mumbai police are not holding back according to another Indian news outlet.

Speak Asia is an odd kind of business : it forms panels of reviewers who pay to join the scheme. Then, when they review products or services, they earn "points" or money or a combination. But, says the Mumbai Police's Economic Offences Wing, the money has not been paid over and income from the scheme has been sent overseas.

In practice, it's a kind of shopping club: pay a membership fee, do some reviews and get access to discounted products against which the "points" can provide further discounts.

“Total money collected by Speak Asia in a span of 18 months (February 2010-July 2011) is more than Rs2,300 crore and the total payouts assured by the company to investors is more than Rs30,000 crore” Rajvardhan Sinha, head of the EOW is quoted as saying. A crore is 10 million.

The company issued a statement in June saying that it could not make payments to members because its accounts had been frozen. But, Sinha said in an open meeting this week, "Sinha said, “Till now, Speak Asia is the biggest multi-level marketing fraud which is being investigated by EOW.” He said Ponzi schemes are proliferating, especially in cases where the multi-level marketing model is being used without selling a product and that companies who do this have no financial integrity."

Speak Asia talks big: it describes itself as "Asia's largest community of sovereign consumers."

And it doesn't let up on the hyperbole:

"As a Speak Asian, you are a leader rather than being a follower. Speak Asia believes in creating new possibilities and realities that are consumer-empowering. The Speak Asia model is based on four major elements:
Research
Speak Asia by its sheer power of community is getting to be at the heart of market research carried out by the organizations. Companies want the SPEAK Asian’s opinion which transforms marketing strategies.
Media Channel
Speak Asia is one of the most innovative media channels today as it allows the companies to place multiple type of marketing and promotional content on our website.
Network
Speak Asians have created a solid network where there is a constant exchange of ideas and opportunities and all Speak Asians benefit from each other’s progress.
Market Place
Our collective power helps us demand the products we need at the price we want, creating a market that is a priority for industry. "

But it's the building of the "community" that raises the interest of the authorities:

"As a Speak Asian, you have the control, the authority, the power to dictate the market place. Speak Asia is one of the largest growing consumer networks because it is a media channel, market place and marketing system rolled into one. This enables you to unlock your true worth and earn wealth, confidence, social standing and respect through multiple channels.
How is it possible? Organizations approach Speak Asia for research; you earn reward points (RP). Companies advertise with Speak Asia you earn reward points (RP). Products are available with Speak Asia at special rates, you earn through savings and selling of the products available on the Speak Asia website earns you more reward points (RP). Speak Asia helps you build your own network and team and you can earn more RPs with every member who is part of your network. And some of your reward points translate into actual income in your bank account and some can be used for purchasing products.
But this is only one part of our journey with you. We help you create your own identity through continuous training. We make sure you develop your own team through regular seminars and conferences. And you can reach out tap opportunity through our advanced technology. We build your confidence; you gain your own identity. You earn, learn and grow with us and bring your hidden potential to the forefront."

According to the Speak Asia website, the Singapore company is wholly owned by a company registered in the BVI. But it has no registered business entities in India even though it has day to day operations there. The company says that its members are paid from the company's bank accounts in Singapore and that there are no banking facilities maintained in India.

The company says it distinguishes itself from multi-level marketing companies because the building of a referral income is only a part of the business model, and even then it is voluntary.

The company's bankers in Singapore were UOB until May this year, it says on its website but it does not say who they are now.