Pakistani IT company Axact running ‘fake degree empire’: report

In a shocking revelation, The New York Times reported Sunday that Axact, an IT company based in Pakistan, was in effect a “diploma mill.” The report alleged that Axact has built a vast online education empire that is earning the company millions of dollars in revenue by issuing fake and worthless degrees.

Axact responded to the allegations officially on their site, describing the story as “baseless, substandard, maligning, defamatory and based on false accusations.”

The New York Times said there are 370 websites run by Axact that operate in a “virtual academic realm,” offering degrees in several disciplines, including technical subjects such as engineering and aviation. Credibility for the sites comes from entire sections dedicated to student testimonials as well as US State Department authentication certificates bearing the signature of Secretary of State John Kerry. All sites have toll-free US numbers where prospective students can call in to ask for further information, and feature names that have a decidedly American tilt to them. This is done, allegedly, to maintain credibility and dupe people into thinking they will get an authentic online education experience.

The Times report said that Axact invests heavily in SEO and SEM so their sites feature prominently in online searches. Sales agents working around the clock aggressively target potential customers by cold calling or upselling, and have also gone to lengths of impersonating government officials in order to close a deal. These agents are the “heart of Axact’s business,” and market a broad spectrum of degrees – ranging from high school diplomas which sell for around US$350 to doctoral degrees, which retail for US$4,000 – according to the report. The primary markets for Axact are the US and oil-rich countries in the Persian Gulf, where a post-graduate degree could result in a promotion or other career benefits.

Vibrant public image

In Pakistan, Axact has for several years taken significant steps to ensure a healthy and positive public image. Founder and CEO Shoaib Ahmed Shaikh claims that his company donates 65 percent of its revenue to charity, and last year, announced plans to educate 10 million children by 2019. Career listings on the Axact site portray the culture of the company as one where employees are empowered and rewarded, with salaries that are well above the market average and access to gyms, transportation, cinemas, libraries, and beach huts. However, the company has always resisted questions pertaining to the specific nature of its business, with Shaikh describing Axact as an “IT and IT network Services Company that serves small- and medium-sized businesses.”

In its official response, Axact maintains that all their business units are “legitimate, legal, and committed to enhancing the quality of IT services across the world.” It also stated that the company will be vigorously pursuing legal action against the publications and those involved.

In a dramatic, late night development, some bloggers in Pakistan also reported to have been served with legal notices from lawyers claiming to represent Axact, demanding that they take their coverage of the report down, or be prepared to pay damages up to PKR500 million (US$5 million). The lawyers also demanded that the editors issue “an unconditional apology and retraction for your illegal, defamatory, slanderous, and malicious actions.”