Freedom 251: ED directs payment gateways not to pay Ringing Bells

The ED (Enforcement Directorate) had received complaints against Ringing Bells, the startup which created the apparent cheapest smartphone, Freedom 251, and had reportedly summoned company founder Mohit Goel to record his statement at the ED headquarters. Now, a report by IBN Live states that the ED has issued directives to companies holding the money on behalf of Ringing Bells, not to release the funds until phones reach the customers. This probe is regarding the feasibility of world’s cheapest smartphone which is priced at a mere Rs 251. According to the report, the company has reportedly collected Rs 1.66 crores in one account and Rs 75 lakhs in another account from the consumers. It is being said that the directives under Foreign Exchange Management Act (FEMA) has been issued to Pay U Money and CC Avenues India Ltd. Last week, a  report  had stated that the Enforcement Directorate would be writing to Ringing Bells’ payment gateway PayU for details on the company’s bank account. The officials reportedly suspected that the company may just run away with the money, in case it is unable to ship the devices on time. Even Telecom Minister Ravi Shankar Prasad said in a statement that the Ministry has inquired into how the company is able to manufacture a smartphone at such a low price. The smartphone priced at Rs 251 has been flooded controversy since its announcement. While many found it hard to believe that such a smartphone exists, many others doubted on the company’s practices and sourcing methods to build the world’s cheapest smartphone. However, Ringing Bells has reportedly claimed to have paid back the money it generated from the first 30,000 pre-booking orders on the first day of the sale this month. Mohit Goel had claimed that the money of all 30,000 customers has been refunded and the company will now accept cash on delivery only. Goel had also  claimed  that the company would make Rs 31 profit on each unit sold. Ringing Bells had received 30,000 orders on the first day and the rest of the customers would have be selected on first-come-first-serve basis as the company had received a mammoth over seven crore registrations. Earlier, Ringing Bells President Ashok Chadha had also announced that the Rs 251 (less than $4) Freedom 251 smartphone customers will be required to make payment only when the smartphone is delivered to them.