A mountain of false claims made by the owner of Ringing Bells, Mohit Goel, has now been revealed in a statement recorded by the Enforcement Directorate (ED). Investigators say that Goel created an over-ambitious business plan that was not workable. But what is interesting that despite all his conflicting statements, Goel still claims to be able to sell the phone for Rs 251.
False Claims Made by Ringing Bells
False Claim 1
At the launch of the product, Ringing Bells claimed it would manufacture the product in India to make it viable at a price as low as Rs 251. The company went on the record saying that the manufacturing unit would be set up in India within 6-8 months.
False Claim 2
When The Quint insistently probed the company on how they planned to deliver the product in 3 months if production would start only in six to eight months, Ringing Bells made yet another false claim, stating that they would be assembling the product in India. Upon further pressure to share the address of the assembling unit, the company simply stopped responding.
Here is the telephonic conversation with the Public Relations Officer which we had recorded earlier.
Will you be able to deliver these phones to consumers by 30 June?
Yes! We will deliver the phones.
How is that possible without Ringing Bells setting up a manufacturing unit?
We will set up the manufacturing unit in 6 to 8 months.
Is it possible to set up such a huge manufacturing unit within a few months?
Yes, we will. In the meanwhile, to meet the 30 June deadline, we are assembling phones.
Could you please share the address of the assembling units?
We don’t share addresses of our assembling units.
False Claim 3
Ringing Bells then claimed that they would import the product and not assemble it in India. Now, we have learnt from the sources in ED that Goel confessed to not having contacted any foreign mobile company for the import of the handsets. Nor had he made any payment, nor signed a contract with any foreign company.
The same Public Relations Officer, Vrinda Mathur, told The Quint that the company had decided to import components of the handsets in order to meet the delivery date.
The company is going to import components for 50 lakh units to assemble the Freedom 251 smartphone. This will be inclusive of import duty but at a much lower rate than the usual Rs 2,500 per piece. This way, we’re able to fix a competitive pricing structure for the finished product which is then passed on to the buyers for Rs 251. We can even share the proof of materials with you to justify those claims.
False Claim 4
Not only did the company mislead its customers and media about the production of the handset, it also knowingly inflated demand for the product in order to boost sales. According to the investigators, only 25 lakh people registered online to purchase ‘Freedom 251’, but Ringing Bells released false statements to the media saying that 7 crore people had registered online in just two days.
Ringing Bells Still Claims It Will Deliver
Interestingly, in spite of all the hue and cry, Goel still made tall claims in his statement to the ED, saying that he would still sell the handset for Rs 251.
The payment gateway CCAvenue for ‘Freedom 251’ has already started refunding the money to the customers. CCAvenue had collected around 75-80 lakh in its escrow account from customers.
According to the investigators, they don’t have any evidence so far with which to charge Goel under FEMA. The probe is still on and the ED is keeping a close watch on the company’s every movement.
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