Ringing Bells Mohit Goel detained: What was promised and what actually went down

After plenty of speculations on whether the Freedom 251 smartphone was for real or some ongoing fraud, it all came crashing down yesterday for Ringing Bells Director Mohit Goel who promised India a smartphone at Rs 251. As per a PTI report, Mohit Goel was detained by the Ghaziabad police on allegations of fraud.

In what appears to be a story forgotten by customers solely because of its low price, it’s the biggies like those involved in manufacturing or sales and distribution that are now getting back. Ghaziabad-based Ayam Enterprises was the company that filed an FIR that lead to Goel getting detained for questioning.

The details of the FIR state that Ayam Enterprises was persuaded by Goel and others from Ringing Bells to take up distributorship of the Freedom 251 smartphone back in November 2015. The distributor claims that it paid Ringing Bells Rs 30 lakhs through RTGS on multiple occasions but was only delivered products worth Rs 13 lakhs. The maximum that Ayam could obtain from Ringing Bells despite follow-ups (including some money) totalled Rs 14 lakhs, which is still less than half of what was promised to the distributor.

To make matters worse, the owners of Ayam Enterprises claim that they were threatened with life if they asked for the rest Rs 16 lakhs, not once but on multiple occasions.

Indeed this appears to be the first time, after a number of allegations that someone managed to prove that Ringing Bells was not good for business.

The smartphone was an instant hit and rose to popularity in a matter of hours after it was announced. It was the impossible, a smartphone running Google’s Android OS priced at just Rs 251. And the price tag that sounded too good to be true was the center of discussions. The launch too was grand and was done with plenty of political presence with the theme of national pride.

“The phone will be popularly priced at under Rs 500… this event and launch stands as a true testimony of success of the latest initiatives taken by the Government of India,” read the invite.

The specifications of the smartphone did not impress the tech audience, but that did not deter fans from pre-ordering a smartphone that cost just Rs 251 per piece.

Advertised Freedom 251.

And there were plenty of problems at launch itself. For starters, the smartphone shown off at the event (despite being a dummy) looked a lot different (read cheaper) than the model shown for advertising and promotional material.

Ringing Bells had received 30,000 orders on the first day. The rest of the customers for the first 25 lakh handsets were to be selected on first-come-first-served basis as the company received about seven crore registrations before the payment gateway crashed.

The Freedom 251 has the Indian flag printed on the back of the device. Image: The Mobile Indian

It was clear soon after the launch that Ringing Bells had no idea as to what its final product (which it was pitching to millions in India) even looked like. Reports of the first hands-on starting pouring in and despite the different design, it was reported that smartphone given for demoes came from another company called Adcom. The units for demo were reportedly prototypes of the final units but oddly had the Adcom name covered using a white marker.

PayUBiz

Then came the bigger problems. PayUBiz, the company handling the payments refused to let go of the Rs 1.75 crore amassed from the lakhs of buyers who had placed their orders for the Freedom 251 smartphone. Its sole reason for the same was to protect the buyer’s money in case the merchant could not fulfil the huge demand.

The money was eventually refunded and Ringing Bells sort to an alternative option, hard cash. It announced that it will simply allow for COD for its first 25 lakh customers. Later it would be the Enforcement Directorate that would direct the payment gateway to not Ringing Bells the payment money.

Cyfuture

Next up in line, was a customer service provider called Cyfuture that accused Ringing Bells of fraud and non-payment of dues, a charge that was refuted by the smartphone maker.

Ringing Bell on the other hand accused the BPO company, Cyfuture, of having failed in handling the huge traffic of customer calls. Cyfuture Founder and CEO Anuj Bairathi said, “We were always sceptical of Ringing Bells and their business model.”

Oddly the reasons Cyfuture cited were similar to the ones customers may have had for purchasing the smartphone. “After several rounds of discussions with their management team and when they showed us names of senior politicians visiting their launch event, we decided to take up their project,” said its founder.

Adcom

Next it was Adcom who came into the picture. ADCOM’s (Advantage Computer) founder and MD Sanjeev Bhatia finally decided to speak out and revealed that the controversial company did purchase handsets at Rs 3600. He also made it clear that Adcom was not related to Ringing Bells in any way but was a customer like the many others. The problem here was that Adcom did not know Goel’s plans to resell the smartphone at a much lower price.

Soon enough it was clear that Ringing Bells did not expect such a response and that it clearly could not deliver to 7 crore registrations that it received in just two days.

Politicans hit back

Soon enough, a case was filed under section 420 of the Indian Penal Code on a complaint filed by Kirit Somaiya, BJP MP from Mumbai North-East. The complaint mentioned that Ringing Bells raised funds by issuing misleading ads and used social media to misguide the public. The MP accused the company of abusing the Tricolour too in the advertisements to misguide the buyers.

What handsets?

Time passed by and Ringing Bells kept shifting its delivery dates. A good 5 months after launch, in July the smartphone maker announced that it has postponed its shipping date from May to June. A few days later, Ringing Bells threw a surprise. Apart from announcing that it would now build affordable Freedom TV sets, Goel told IANS that, “We are ready with nearly two lakh ‘Freedom 251’ handsets. We will start delivery from June 30,” and he would also open registrations for those who wished to buy the handset once again.

Mohit Goel at the launch of the Ringing Bells Freedom 9900 TV.

As expected, more excuses came along. CEO Mohit Goel told Tech2 that the Rs 251 smartphone will be ready to ship from 30 June, and the 2 lakh units will be shipped by 4-5 July. He said that the delay was due to the battery, and its ‘Made in India’ smartphone was finally ready.

Seeking Government help

Goel told Tech2 that his company had been looking for a land for the factory and plants. “The next phase will start if we see some positive signs and support from the government,” He also suggested a subsidy or some form of support could help them achieve the 60 crore units figure that we plan for the nation.

So did they arrive?

After the launch of the Freedom TV, we did get our hands on the final product. It had misleading specifications on the box, but we concluded that at Rs 251, it was hard to find a better offering given the price tag.

So did the handsets reach their customers? We conducted a poll in August 2016 and majority of our users (61 percent) had the same question in mind, “Where’s my phone?” with the rest claiming that it was just a “bad dream”.

Hello MDM

Ringing Bells’ MD Mohit Goel in December 2016 put out a statement claiming that the company had actually delivered 70,000 units of its Freedom 251 smartphone. As of now nobody can tell how many units Ringing Bells actually shipped. But the Economic Times soon reported that the same company, with the same executives on top, now opened up a business with an objective to manufacture and sell the same products.

Dharna Goel CEO of Ringing Bells according to a statement had resigned. Mohit Goel, the managing director of Ringing Bells, the company that offered to sell a smartphone in India for just Rs 251 has quit the company. Offices of Ringing Bells had reportedly been shut since mid-December reported the Times of India. The same went in for the smartphone dealers who took orders for Goel’s ponzy scheme.

Indeed it remains to be seen if the government even decides to look into the matter for now. Consumers may have been refunded their money, but it’s the distributors and dealers that will soon come knocking at Goel’s door and from the looks of it, Ayam Enterprises is just the first one.

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from http://tech.firstpost.com/news-analysis/ringing-bells-mohit-goel-detained-what-was-promised-and-what-actually-went-down-364020.html