Alleging fraud, ED attaches Amway India assets worth Rs 757 crore
Assets worth more than Rs 757 crore of Amway India, a company promoting multi-level marketing (MLM) scheme, have been attached under the Prevention of Money Laundering Act. The Enforcement Directorate gave this information on Monday. The Federal Investigation Agency gave this information by issuing a statement on Monday. The agency alleged that the company was committing a “scam” under the guise of a “direct-selling MLM network”.
According to NDTV, the agency said, “The money laundering investigation conducted by the ED has revealed that Amway is running a pyramid fraud under the guise of a direct selling multi-level marketing network.”
The ED further said, “Without knowing the actual facts, the common gullible public is tempted to join as members of the company and buy the products at exorbitant prices and thus is losing their hard earned money.” The new members are not buying the products to use, but because of the dream of getting rich shown by the upper level (upline) members. The fact is that the commission received by the upline members is a major reason for the increase in the prices of the products. “The entire focus of the company is on promoting how members can become rich by becoming members,” the agency said. No attention is paid to the products. The products are used to show this mlm pyramid fraud as a direct selling company.
On the other hand, Amway spokesperson said that they are cooperating with the authorities towards a fair legal and logical conclusion of the pending issues. The ED issued a provisional order under the Prevention of Money Laundering Act to attach assets worth Rs 757.77 crore of Amway India Enterprises Pvt Ltd. The properties attached by the agency include land and factory building, plant and machinery, vehicles, bank accounts and fixed deposits in Tamil Nadu’s Dindigul district. Of the total assets attached at Rs 757.77 crore, immovable and movable assets are worth Rs 411.83 crore, while the balance amounted to Rs 345.94 crore deposited in 36 bank accounts belonging to Amway.
The Amway company said the ED’s action pertains to a 2011 investigation and since then, the company has been cooperating with the agency and has shared all the information sought by it from time to time. A company spokesperson said, “Amway has a rich history of maintaining the highest standards of integrity, corporate governance and consumer protection and is well ahead of time in the interest of consumers.” At the same time, officials associated with the investigation said that the company has been operating in the country for years and many people were associated with its ‘MLM’ scheme. The agency said the company collected a total amount of Rs 27,562 crore from its business during 2002-03 to 2021-22 and out of this it ‘paid’ Rs 7,588 crore to its distributors and members in India and the US. The federal agency accused the company of a multi-level marketing ‘scam’.
It is to be known that in December 2021, the government had banned direct selling companies from promoting pyramid schemes. The Consumer Protection (Direct Selling) Rules, 2021 were aimed at protecting the rights of consumers and preventing companies involved in direct selling such as Tupperware, Amway and Oriflame from promoting money-raising schemes.
A company spokesperson said that the recent inclusion of ‘Direct Selling’ under the Consumer Protection Act (Direct Selling) Rules, 2021 has brought much needed legal and regulatory clarity to the industry, while Amway India is in compliance with all laws and regulations in India. Confirms full compliance. “As the matter is sub-judice, we do not wish to comment further,” the spokesperson said.
