Bad news about SpeakAsia News broke on Star News (formerly ABP News) and completely changed the fate of the company. India's electronic media said that SpeakAsia was a fraudulent company which was cheating the public by seeking an investment of Rs. 11,000 with a promise of repaying Rs. 52,000 per year.
They showed statements from an employee of SpeakAsia making these alleged claims on record.
"This was done with an ulterior motive," says Sharma. "The media leveled false and baseless allegations."
In response, SpeakAsia issued defamatory notices against some media companies and also initiated a suit for defamation against one of the media channels before the Bombay High Court.
Sharma had a press conference organized on 15 May to explain the business model of the company to the media. On 14 May, he had requested Kaur to appoint him as CEO of India until the allegations were cleared.
In a May 2011 interview with Indian news channel Headlines Today, Sharma said that his company had not been given a chance to explain its business model to the regulating agencies and the government. He suggested that his company's business model had been misunderstood, that it was not a ponzi scheme. He gave the example of Galileo who was hanged because he said that earth was not flat but round-a fact not understood during those days.
To clarify its stand, SpeakAsia wrote letters, seeking a hearing to explain its business model, to various Central and State authorities including to Prime Minister, Home Ministry, RBI Governor, Economic Offences Wing, among others. There was no response whatsoever from any of the authorities, says Sharma.
On May 23, 2011, Reserve Bank of India issued a Circular to all the banks mentioning that the business of SpeakAsia to be akin to Money Circulation Scheme and Multi-level Marketing.
The company was doing bulk inward remittances to its Panellists from Singapore to their bank accounts directly. "From May 22, 2011, such inward remittances were not processed by the Singapore banks and when it was enquired with the banks, it was orally informed that, they have received a communication from Indian authorities in this regard," says Sharma. These banks however refused to disclose who exactly were these authorities?
As a result of this Circular, banks refused to do bulk remittances from Singapore, and the payments to Panellists were stopped temporarily for the first time since their commencement of business, says Sharma.
In June and July 2011, more complaints were filed against SpeakAsia. For example, as case was registered by CBCID, Hyderabad against SpeakAsia on the basis of a complaint by an NGO named Corporate Fraud Watch.
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