Amway India over assets worth over Rs 757 crore in money laundering probe
New Delhi, April 18
As part of a money-laundering probe, Amway India, one of the country’s most well-known multi-level marketing (MLM) and direct selling companies, has been arrested in connection with a Rs. 757 crore worth of assets attached to the Enforcement Directorate (ED).
The federal agency released a statement Monday alleging that the company was committing a “scam” by implementing pyramid “fraud” in pursuit of a direct-selling MLM network.
“The whole focus of the company is on promoting how members can become rich by being members. Not focusing on products.
“Products are being used to show this MLM pyramid scam as a direct-selling company,” ED alleged.
A spokesman for Amway said they were cooperating with authorities “towards a fair legal and logical conclusion to the pending issues.”
Amway India Enterprises Pvt. The ED has issued provisional orders under the Prevention of Money Laundering Act (PMLA) to attach assets worth Rs 757.77 crore.
The company has been accused of “running a multi-level marketing scam”.
Attached assets include Amway’s land and factory buildings, plant and machinery, vehicles, bank accounts and fixed deposits in Dindigul district of Tamil Nadu.
The value of the fixed and movable assets out of the total attachment value is Rs. 411.83 crore while the remaining Rs. 345.94 crore was deposited in 36 bank accounts belonging to Amway, the agency said.
Amway said the ED had taken action in connection with the 2011 investigation and since then the company has been cooperating with the agency and sharing all information requested from time to time.
“Amway has a rich history of maintaining the highest levels of probability, integrity, corporate governance and consumer protection, which are at the forefront of consumer interests,” the spokesman said.
Officials involved in the investigation said the company has been operating in the country for years and has many links with its MLM scheme.
From 2002-03 to 2021-22, the company spent a total of Rs. 27,562 crore, of which Rs. The agency said a commission of Rs 7,588 crore was “paid”. From 2002-03 to 2020-21.
“The ED money-laundering investigation has revealed that Amway is running a pyramid scheme in pursuit of a direct-selling multi-level marketing network.
“Without knowing the real facts, ordinary people are motivated to join the company and buy products at higher prices and thereby lose the hard earned money,” the federal agency said.
New members are not buying products to use them, they are becoming richer by becoming members as shown by offline members.
“The fact is that the commissions received by offline members contribute immensely to the increase in product prices,” it said.
Amway in India during 1996-97 was Rs. 21.39 crore as share capital, with dividends, royalties and Rs. Money-laundering probe reveals that Rs 2,859.1 crore was sent as “huge” amount. Other payments to their investors and parent companies.
Companies such as Brit Worldwide India Pvt Ltd and Network Twenty One Pvt.
“Promoters are holding mega meetings and showcasing their luxurious lifestyles and using social media to attract fraudulent investors,” ED said.
A company spokesperson said that the recent inclusion of direct selling under the Consumer Protection Act (Direct Selling) Rules, 2021 has given much-needed legal and regulatory clarity to the industry, while at the same time reaffirming Amway India’s continued commitment to the spirit and letter. All laws and regulations in India.
“Since the matter is sub-judicial, we do not wish to comment further,” the spokesman said.
The Center in December 2021 banned direct selling companies from promoting pyramid and money circulation schemes as it notified new regulations for the direct selling industry.