Was it really too good to be true, or is there some other reason the man behind the “four-dollar smartphone” might be headed to prison? That’s the main question courts will have to answer now that authorities have arrested Mohit Goel, the director of Indian phone manufacturer Ringing Bells.
The charges stem from an allegation of “cheating” from one of Goel’s distributors, Ayam Enterprises. Ayam claims Ringing Bells owes them 1.6 million rupees, about 24,000 U.S. dollars. According to quotes reported by CNN, Akshay Malhotra, owner of Ayam, said he paid Ringing Bells about three million rupees ($45,000) last February for phones and accessories. According to the complaint, Ayam only received products valued at about 400,000 rupees, and many of those, the company claims, were “inferior” quality.
Malhotra told CNN he demanded a refund, but only received about one million rupees. According to the report, Malhotra asked for the rest of the money, but claims Goel refused, then became threatening.
“When we called them to ask for our money back and to end our association with them, he said he didn’t have the money… He threatened that something will go wrong if we don’t wait quietly.”
A lot of people are not surprised to see problems at Ringing Bells. When the company announced its Freedom 251 smartphone, they promised to price the handset at a mere 251 rupees, about four bucks. The industry rolled its collective eyes, saying the price tag was much too low … the offer was literally too good to be true.
Many analysts put specific numbers to their disbelief, one, in particular, saying the company could lose more than $25 per phone at that price. Whatever the loss might be, it seems like it may be total. Media reports an inability to contact the company, and Goel recently stepped down as managing director, after he promised to pay multiple distributors back.
The total amount Goel’s company may owe its distributors is up for debate, but some are saying it could be upwards of $120,000. At this point, though, the exact figures are not the story. The headline is another company that made promises that were too big and a leader who may well pay for those unfulfilled promises with his freedom. Courts will decide the ultimate fate of both Goel and his company, but the court of public opinion is already ruling … and that ruling is not coming out in favor of the accused.