New Delhi: Regional resellers of Realme smartphones and mobile phone retailers in Maharashtra state that the company’s regional resellers in Nashik, after prepaying Rs 3.84 lakh crore, did not send them stock of handsets. absconded under circumstances.
In September, about 22 Marashtra regional distributors filed an FIR in Aurangabad against Eagle Electronics India Private Limited (EEPL) and its directors Anil Vasudev Khemani, Sita Vasudev Khemani and Vasudev Radhakrishnan Khemani alleging The amount of fraud is between 60-70 crore. The Retailers Association said the $600-700 million figure also included funding from other distributors and retailers.
From 2019, Eagle Electronics is Realme’s designated regional distributor for Northern and Southern Maharashtra, Marathawada and Konkan regions.
According to the dealer, Eagle Electronics has the practice of taking advance payment before delivery, but since Realme’s Pune warehouse does not receive stock on a regular basis, delivery takes 3-4 days.
“They didn’t give us stock from the end of July to the whole month of August, they made excuses all month,” the FIR copy reads.
On September 7, Realme informed the dealers that the contract with EEPL had been terminated, and the company had withdrawn the bank guarantee to settle the debts owed by the suspected fraudulent regional dealers.
Distributors say they are now caught in a trap as their finances run out after prepayments, while retailers stop payments due to outstanding credit notes.
More than 600 retailers in the state have asked regional distributors to clear Rs 7 crore credit notes, claiming their money has been taken by regional distributor EEPL without delivering stock.
The All India Mobile Retailers Association said in a letter to Realme India CEO Madhav Sheth last week that the local Realme team was aware of the facts but had not taken appropriate action.
“The problem was exacerbated one day when the regional dealer absconded to close his business, in the process the company revoked the regional dealer’s bank guarantee without providing any information to the regional dealer, for Their own unpaid, not even notified ads, and retailers about closures,” the letter reads.
“Now, under pressure from more than 600 retailers, a group of distributors has been approached for their outstanding credit note claims of up to Rs 18 crore and AD (regional distributors) of around Rs 6 crore have been Lying with ZD. The name of the stock advance,” AIMRA said in a letter to Sheth.
Realme did not respond to ET’s inquiries.
The company’s problems in offline retail go beyond allegations of fraud.
India’s second-largest smartphone brand is facing boycotts from offline retailers in Gujarat, Bihar, Karnataka and Haryana, according to the latest IDC India rankings. Retailers are removing the brand’s hoards from their stores and returning stock, alleging the company has been engaging in the unethical practice of selling its brand at cheaper prices online compared to offline retail. product.
In a separate letter to the company on Sept. 30, AIMRA said it had failed to deliver on its commitments to retailers to ensure sufficient stock and was creating a price mismatch between offline and online.
The association has previously said that if prices don’t match, retailers will charge distributors the difference.
National Joint Secretary Navneet Pathak said: “Due to continued irregularities and mismatched offers and lost customers, we are forced to debit the difference to our distributors by selling our products at online prices and deducting a 4% operating base profit margin, “AIMRA, write to Realme.
The Retailers Association has sent a letter to its national retailer network to alert them to the incident and keep records of transactions with distributors and brands and ensure timely resolution of claims.