Pakistan rocked by 'fake degree' scandal

Pakistani journalists and employees of Axact's media channel Bol TV protest outside the Karachi press club (27 May 2015) Image copyright AP
Image caption More than 2,000 Bol staff journalists now face an uncertain future

Was the Pakistan-based internet technology firm Axact doing what a New York Times International report last week accused it of doing - selling fake university degrees online?

Whatever the answer, the report could not have rocked Pakistan like it did if it was not for the fact that Axact, a software company, was planning to launch a multi-platform print and electronic media group called Bol (Speak Up).

This now seems to have been compromised.

In a damning report on 17 May, the New York Times revealed what it called "a vast education empire" of hundreds of American universities and schools offering online degrees in various disciplines.

The strange thing about it was that all the "glossy and assured" websites of these institutions - at least 370 in number - existed only "as stock photos on computer servers", the report claimed.

'Last message'

The one real thing about this internet empire "is the tens of millions of dollars in estimated revenue it gleans each year from many thousands of people around the world, all paid to a secretive Pakistani software company", the report said.

Image copyright Reuters
Image caption Axact is seen by its competitors as a tough rival which threatened to change Pakistan's media landscape
Image copyright Reuters
Image caption Axact CEO Shoaib Sheikh was arrested by Federal Investigation Agency officials on Wednesday

Axact has denied the allegations. The company's CEO, Shoaib Sheikh, in a message posted on video sharing website Dailymotion called it a conspiracy "to break our resolve, to derail Bol, to shut down Axact".

The message, titled "Shoaib Sheikh's last message before getting arrested", was posted on Tuesday, hours before he was taken in by the Federal Investigation Agency.

Speaking in Urdu, Mr Sheikh said: "They say we sell fake degrees and diplomas, but we only offer an educational platform, which integrates with our partners… If those partners own universities which are legitimate entities within their respective jurisdictions, then it is perfectly legitimate for us to manage their call centre services, their chat services and their document management services."

'No plausible explanations'

But despite the denials, the ground appears to be slipping from under Axact's impressive multi-storey office building in Karachi's upscale Defence area.

Image copyright EPA
Image caption The Federal Investigation Agency's investigation into the activities of Axact have generated saturation media coverage in Pakistan
Image copyright EPA
Image caption Axact's offices in Islamabad were also targeted

One apparent factor is the scale of the alleged fraud.

"There have long been rumours in IT and business circles about Axact's business model and quite how it was able to generate massive amounts of cash that the company appeared to be making," says a Dawn newspaper editorial on 22 May.

It further says: "No plausible explanations were offered by the company, and it routinely dismissed the allegations as nothing more than rivals' jealousies. Clearly, that status-quo is no longer tenable."

With the arrest of the five top executives of Axact, the apparent insinuation at the time appears to be that the multi-million rupee Bol empire is being funded by the fake degree scam.

But while investigations into this scam may be a top priority with the FIA, all eyes are on what happens to Bol.

Image copyright AFP
Image caption The ground appears to be slipping from under Axact's impressive multi-storey office building in Karachi

The minute the NYT report hit the stands on 17 May, Pakistani TV channels went into overdrive in an apparent bid to drag down Bol, a menacing looking potential rival that Axact bosses said would change Pakistan's media landscape.

It was an uneasy reminder of the convulsive media wars of last year when most news channels ganged up to drag down Geo TV.

These wars are in turn a throwback to the lawyers' movement of 2007, when the media and protesters ganged together in common cause to weaken, and subsequently oust military ruler Gen Pervez Musharraf.

Flushed with that power, the electronic media spawned larger-than-life talk show hosts with immense clout in political and military circles, often assuming the role of power brokers and arbiters of disputes.

More than two years ago some of these star journalists started to leave their channels and seemingly pass into oblivion.

They were actually gathering at Bol - a high profile print and electronic media arm of Axact which had not yet gone on air.

But despite being off camera, they were being looked after very well.

Those in the leading roles were offered hefty salaries, houses, cars and fringe benefits that included fees for gyms, swimming clubs, medical cover and retirement support.

Nearly all of the more than 2,000 members of staff that Bol had hired until last week drew salaries that were three to four times greater than those holding equivalent positions elsewhere.

These staffers manned Bol's various TV channels (news, documentaries, entertainment etc), Urdu and English language newspapers, and Urdu and English language websites.

Image copyright Getty Images
Image caption Axact offices have been raided by investigators
  • Axact's mission statement is "Winning and caring"
  • It was started by Shoaib Sheikh in a small office during the dotcom boom in 1997
  • It now has a "presence" in 120 countries with more than 25,000 employees and associates, according to its website
  • Media group Bol was intended to "popularise" an "independent Pakistan"

The momentum set by investigations into the fake degree scam finally caught up with Bol on Saturday when President and Editor-in-Chief of Axact's media group, Kamran Khan, tweeted he was quitting.

This triggered turmoil and confusion, and many more announced they were leaving.

Some of them said they were doing it for "principles", others said they had been blinded by the glitter and now realised the dark side of it, but few said they were quitting because they feared a financial crunch.

But this is what most of them are being criticised for on social media now.

All of those who have quit so far are "star" journalists, who were placed in leadership roles. Most of them were instrumental in poaching 2,000 subordinate staff from rival media houses to fill positions such as desk editors, camera crew and support staff.

So while they have jumped the ship, they are seen by many as having abandoned their crew to an uncertain fate.

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