Dubai: A sense of foreboding has gripped more than 6,000 Dubai households following a crackdown on an outsourcing company into which many have invested their life-saving.
Both Dubai offices of the controversial firm Sunfeast Infotech have been sealed by the Department of Economic Develpment (DED) and their two Indian owners are behind bars awaiting trial on criminal charges.
Nobody even knows when they will be released and what will happen to the money, estimated at millions of dirhams.
Like any seemingly viable, but unsustainable money-making scheme, Sunfeast Infotech’s audacious business model looked good while it lasted, which in this case was just a little over one year.
But when the bubble finally burst last fortnight it left behind a long trail of devastated investors -- around 6,000 by the company’s own admission.
It’s not immediately clear what led to the closure. But this much is certain: lured by the promise of incredible returns, hundreds put all their life savings to procure outsourced ‘projects’ from Sunfeast.
When that was not enough, many borrowed from banks and illegal money lenders.
Tony from the Philippines took Dh100,000 from a loan shark while Bruce from Nigeria signed up for a Dh50,000 bank loan.
Some even sold their assets and dug into funds kept aside for their children’s education.
Pakistani Ajaz sold his wife’s jewellery worth Dh100,000 and Indian Mukesh used Dh200,000 earmarked for his son’s university expenses.
Investors, who include people of various nationalities and professions, said they learnt about Sunfeast’s home-based typing jobs through word of mouth and radio commercials.
Those visiting their Ghusais and Oud Metha offices looking for work were asked to pay a refundable Dh500 security deposit for each assignment or ‘project’ as it is known in the company’s parlance.
‘Customers’ were handed a flash drive with several pages of manuscript in PDF format which they were required to type into text format and submit within 25 days.
Regardless of whether they submitted the ‘finished project’ in two days or 12, they were paid Dh250 only at the end of a 30-day cycle.
In theory, the customer breaks even in two months and any extra job after that is profit.
For instance, if Mr X takes 10 typing projects for Dh500 each on March 1, he makes Dh2,500 on April 1. The initial Dh5,000 deposit stays with the company against which Mr X takes 10 more assignments. The following month he earns Dh2,500 more and so the cycle goes.
At the end of their monthly cycle, hundreds queued up at Sunfeast’s fourth floor office on Oud Mehta Road to collect their ‘salary’ in cash or cheques.
As long as they were paid, nobody bothered to find out how anyone could possibly make a fortune out of typing a few sheets of paper.
In fact, many who took more jobs than they could handle further outsourced the typing jobs back home. One enterprising man even set up a temporary typing centre at his home in India where young students were hired to do the job.
“It was raining money. In January I deposited Dh2,000 for four projects. After a month I got Dh1,000 while my deposit remained intact. So I got greedy and upgraded my package with 1,000 projects for Dh50,000 that I had saved for my wedding,” said Indian sales manager Raunik. “I never suspected a scam, but that’s what it looks like now.”
Those who smelled something fishy were given elaborate explanations.
A Deira shopkeeper who forked out Dh250,000 said: “I asked Sunfeast bosses why they weren’t outsourcing to India where they are headquartered, but they cited India’s taxation rules as a ruse and that convinced me.”
Since the April 29 raid on their Dubai offices, calls and emails to the company’s headquarters in India remain unanswered. Their staff phones here are either switched off or ring incessantly.
A ticker on their website, meanwhile, tries to calm jittery investors: It’s reproduced here verbatim: “We Humble request to our valuable customers, the Legal Processing is going on, all problems will be solved in four days. No need to worry about your SALARY and your Money, within One Week we will open our company Under Dubai Government permission. Kindly Cooperate.”
But the appeal has done little to allay fears of investors. Hundreds have taken on the internet to vent their frustration.
By Wednesday views on an online forum called ‘Sunfeast Infotech fraud’ had crossed 106,000. There’s a separate forum for Filipino investors too.
Sunfeast’s marketing manager Radhai Gopalakrishan, however, continues to put up a brave front. “We will open on May 15. Everything will be alright,” she told XPRESS on a rare occasion when we managed to catch her on the phone. It’s the same line she toes online.
A post by her states: “Sunfeast Infotech will function in 10 days. Investigation is going on... in one week the formalities will be finished. Whoever is willing to continue they can continue with us, otherwise they can cancel the contract and can take the money they deposited. We didn’t force anyone to join. If you don’t like it you can cancel the contract, but don’t give false complaints, 6,000 families are surviving on Sunfeast. I request everyone not to spoil it.”
(Names of investors changed to protect idenity)