Is the Rs 251 smartphone, Freedom251, turning out to be too good to be true? While the skepticism over the company’s ability to sell the phone at such a low price continues unabated, new problems are piling up-—the latest being the possible shut down of its Noida office.
The company, Ringing Bells, has also faced queries from Income Tax department, the Enforcement Directorate and Department of Electronics and IT. ED officials are understood to have quizzed the promoters of the company on their business model. When contacted by TOI on Wednesday, Ashok Chadha, the president of the company and the main associate of promoter Mohit Goel, said, “all is well”.
He denied reports that the company had shut shop in Noida. “We are very much in business, and are not running away,” he told TOI. “The problem with our office has to do with the owner of the plot who seems to be having a issues with the Noida Authority for renting out a property meant for industrial use as a commercial office”, he said, clarifying that if the landlord is not able to settle issues with the authorities, the company will shift to a nearby premises.
Questions have also been raised on the advance payment accepted by the company for future deliveries of smartphones. Chadha clarified that the company had received nearly Rs 75 lakh in online booking from 30,000 prospective customers, which it now plans to refund. “This money never came to us and was not even supposed to come to us until we deliver the handsets. That’s in line with the compliance rules of the payment gateway. In any case, we have now decided to refund this money and will go for cash-on-delivery,” Chadha said. TOI could not verify whether those who had paid the advance had received refund.
The company maintains it will start delivering the phones from April 15 at the committed price of Rs 251, on which it will earn a profit of Rs 31. “Our business plan is intact. As far as funding is concerned, we are running short cycles (of orders), and thus will require only some money,” Chadha said, without elaborating further on the sources of funding. There has also been trouble for the company from a Noida-based BPO, Cyfuture, which provided call center services for booking and enquiries about the phone. Cyfuture has filed a police complaint alleging non-payment of dues by Ringing Bells. Ringing Bells claims that the BPO failed to provide satisfactory services and its contract has been terminated.