A PROFILE of Mohit Goel, managing director of Ringing Bells Private Limited, on the networking website, LinkedIn, says he has an MBA degree in marketing from Amity University, and a Bachelor’s degree in business administration from Western Sydney University. Ringing Bells hit the headlines last year for coming up with ‘Freedom 251’, touted as the world’s cheapest smartphone, priced at Rs 251.
But a day after he was arrested by Ghaziabad police on allegations of fraud, Goel told police he had only studied till Class VIII, following which he took lessons to improve his “English speaking skills”. “Initially he told us he had an MBA degree from Amity University. Later, he claimed he had studied till Class VIII, and that he failed his exams. He belongs to a middle-class family from Shamli district in Uttar Pradesh. He took an English-speaking course. These are claims he made during preliminary investigation. We are verifying what he said,” said a senior police officer.
An Amity spokesperson confirmed that Goel was an alumnus, but could not confirm what course he was a student of, or whether he pursued distance learning.
Goel was arrested on Thursday evening after the owner of a Ghaziabad-based company, Ayam Enterprises, filed a fraud case against him and four others. The complainant, Akshay Malhotra, was a distributor of the ‘Freedom 251’ smartphones. Malhotra alleged Goel had duped him of Rs 16 lakh.
This is not the first complaint that has been filed against Goel, police said.
“There is an FIR against him in Kheri (No. 301/17), filed by another distributor, Ranjit Kumar. While the FIR in Ghaziabad pertains to a fraud of Rs 16 lakh, Kumar alleged he was duped of Rs 12 lakh. Similar cases of distributors being duped of Rs 10-12 lakh have been reported in Hardoi, but we are still verifying those. There was a similar case against the company in Noida,” said Manish Kumar Mishra, Circle Officer, Ghaziabad.
In March last year, BJP MP Kirit Somaiya had met senior police officers in Noida after an FIR was filed on the basis of his complaint against Goel. With Somaiya alleging that “this is possibly the greatest ponzi scheme the country has seen”, an FIR under IPC section 420 (cheating) and the IT Act was filed against Goel and others.
Last year, Goel and his wife, Dharna Garg, resigned from the position of Managing Director and CEO of Ringing Bells. “He made his brother, Anmol, the head of the company and formed another company. He told us during questioning that the Ringing Bells offices were shut down and hoardings were removed,” a police source said.
“He told us he was trying to find ways to earn a lot of money. One day, his domestic help asked him to give her a smartphone. He started looking at the reach of smartphones and compared them to newspapers. He said that although the cost of a newspaper is around Rs 82, it is sold to the public at Rs 2-5. He found that ‘at least a crore people’ did not own a mobile phone in India. He thought that even if he gives a smartphone to half of them, he could earn a lot of money. He came to know that the difference in mobile phone prices in China and India was about 300 per cent, and approached a Taiwan-based company,” the police officer said.
“After the launch, he got six lakh responses from people who wanted to buy the phone. In 48 hours, the number jumped to 25 lakh. In the last one year, around 72,000 of these phones have been sold but money was taken from lakhs of people. As soon as a complaint was about to be filed against them, they would pay the distributor the money they owed. But in the last few months, the company started running into losses. That is when he disassociated himself from the company,” said the police officer.
At the time of its launch, Goel had tried to get funding under the ‘Digital India’ initiative, but the government had clarified that it had nothing to do with the phone.