Indian industry associations have condemned the arrest of Amway India MD and Chairman William S. Pinckney and other officials early this week. While trade body Indo American Chamber of Commerce is likely to meet government officials shortly, FICCI has already written to the chief secretary in Kerala pertaining to this matter.
“The government needs to make regulations for genuine direct selling companies doing business in the country. They generally get clubbed with other companies selling Ponzi schemes, like we saw in West Bengal. The government really needs to focus on this issue so that genuine companies do not face such hurdles,” said Shourya Mandal, National President, Indo American Chamber of Commerce.
According to FICCI, the arrests were unwarranted since no criminality was involved and hence should have been handled as a consumer redressal. “This arrest will give an wrong message to the global business community and might also have adverse impact on Indo-US business relationships,” FICCI said.
Currently, the direct selling industry’s turnover is about Rs 6,000 crore and employs over 60 lakh people as distributors, selling agents or representatives of direct selling companies. Interestingly, about 70 per cent of them are women.
“Arresting the Managing Director of a company, which has been supporting all investigations is not justified. There is no clarity in the law for genuine direct selling companies; we are urging the government to do so (clarify laws for direct selling) as quickly as possible,” said S Subramanian, Finance Director, Oriflame.
According to Chavi Hemanth, secretary general, Indian Direct Selling Association, due to lack of clarity between the direct selling business model and fradulent pyramid schemes, harassment continues.
“There is nervousness in the direct selling industry in the country after the unfortunate incident with Amway. We have been consistently following with the government to have an appropriate framework for the direct selling industry and only last week we had met Finance Ministry officials in this regard. We have provided the government with clarifications on the definitions of the ambiguous schemes,” said Ujjwal Mukhopadhyay, Treasurer, IDSA and MD, Avon India.
