Thursday, March 17, 2016

ED probing Ringing Bells for alleged FEMA violation

Serious Fraud Investigation Office (SFIO) has sought to inspect finance books of Ringing Bells, the seller of Freedom 251 smartphone, which the company touts as the world's cheapest at Rs 251.

Telecom and IT minister Ravi Shankar Prasad said in Parliament on Wednesday that SFIO, which is under the corporate affairs ministry, has advised the Registrar of Companies (RoC) to seek information from Ringing Bells and its directors under Section 2016 (1) of the Companies Act and send a report through the Directorate of Enforcement. Under Section 206, the RoC can inspect books of a company.

The letter had gone out on February 26 after the corporate affairs ministry took suo moto action on news coverage and asked SFIO, through a February 11 letter, "to keep a watch on the activities of the company which appear to be suspicious", Prasad said.

The SFIO, in turn, sent its research report along with a proposal to call for information from the RoC. The Enforcement Directorate is investigating the company for possible violations of the Foreign Exchange Management Act.

Besides these probes, an internal committee was constituted by the Department of Electronics and Information Technology (DeitY) on February 20 to review the issues related to Freedom 251.

"Ringing Bells was informed vide Deity's letter dated February 22 that mobile phones have been mandated under 'Electronics and Informatio Technology Goods (requirements for compulsory registration) Order, 2012' for compliance to Indian safety standards effective September 13, 2015. Therefore, the company was required to comply with BIS registration based on Indian safety standards," Prasad added. The minister said concerns were raised regarding the offer made by Ringing Bells.

Also Read Ringing Bells to refund Freedom 251 payments

The Indian Cellular Association (ICA) informed that a smartphone with the technical specifications advertised by the company cannot be manufactured and made available at such a low price.

The company faced more trouble after its much-hyped launch backfired as the Noidabased BPO Cyfuture, which was engaged by Ringing Bells to field customer calls, filed a police complaint against the company alleging fraud and non-payment of dues and seekingRs 80 lakh as damages.

Ringing Bells opened bookings for Freedom 251 on February 17, but due to unprecedented demand, the website crashed and was revived only once before it went down again.

The bookings closed on February 21. The company has since returned money taken for pre-bookings from customers and said it will sell phones only via cash on delivery from April till June.

"Make in India" and "Digital India"’ has nothing to do with Freedom 251 smartphone

Ringing Bells announces "Cash on Delivery" payment option for Freedom 251 Smartphone

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