HYDERABAD: The Enforcement Directorate's (ED) Hyderabad wing has provisionally attached assets worth Rs 757.77 crore belonging to MLM giant Amway India Enterprises Private Limited, accused of running a multi-level marketing scam.
The attached properties include land and a factory building in Dindigul district, Tamil Nadu, plant and machineries, vehicles, bank accounts and fixed deposits. These include immovable and movable properties worth Rs 411.83 crore and bank balances of Rs 345.94 crore from 36 different accounts belonging to Amway.
The MLM giant has collected an amount of Rs 27,562 crore from its business operations from 2002-03 to 2021-22 and has paid a commission of Rs 7,588 crore to its distributors and members in India and in the USA during the same period, said ED on Monday. Meanwhile, Amway also responded to the ED action and released a statement.
ED took up the investigation after Hyderabad city police arrested Amway's key operatives. The investigation has so far revealed that Amway is running a pyramid fraud in the guise of direct selling and the prices of most of the products offered by the company are exorbitant when compared to the popular alternatives from reputed manufacturers being sold in the open market.
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Amway has brought Rs. 21.39 crores as share capital in India in 1996-97 and till 2020-21, the company has remitted a huge amount of Rs 2,859.10 crore in the name of dividends, royalties and other payments to their investors and parent entities.
M/s. Britt Worldwide India Private Limited and M/s. Network Twenty One Private Limited also played a major role in promoting Amway's pyramid scheme by conducting seminars for members who joined. The promoters also used to conduct mega conventions and flaunted their lavish lifestyles and used social media to lure gullible investors.
Amway in a statement said, "The action of the authorities is with regards to the investigation dating back to 2011 and since then we have been cooperating with the department and have shared all the information as sought for from time to time since 2011. We will continue to cooperate with the relevant government authorities and the law officials toward a fair, legal, and logical conclusion of the outstanding issues. However, the recent inclusion of Direct Selling under the Consumer Protection Act (Direct Selling) rules, 2021, has brought in the much-needed legal and regulatory clarity for the industry, while again confirming Amway India's continuous compliance with the spirit and letter of all laws and regulations in India. Amway has a rich history of maintaining the highest levels of probity, integrity, corporate governance, and consumer protection, which are much ahead of time in the interest of the consumers at large."
The statement also added, "As the matter is sub judice, we do not wish to comment further. We request you to exercise caution, considering a misleading impression about our business also affects the livelihood of over 5.5 lakh direct sellers in the country.”