CHENNAI: The Enforcement Directorate (ED) has filed a charge sheet against Amway India, a direct marketing company, under the Prevention of Money Laundering Act, 2002 (PMLA).
The agency has alleged Amway India Enterprise Private Limited has been operating multi-level marketing and money circulation schemes and generated Rs 4,050.21 crore by cheating subscribers.
The company collected more than Rs 2,859 crore from its members, siphoned off and parked in the bank accounts of overseas investors in the name of dividend, royalty and payments for other expenses, ED said in a note.
The ED has attached movable and immovable properties of the company to the tune Rs 757.77 crore. Further probe is underway. The ED has filed a prosecution complaint under the PMLA, 2002, against Amway on the basis of first information reports (FIRs) filed in Telangana.
The FIRs alleged, “Amway has been promoting an illegal ‘Money Circulation Scheme’ under the guise of sale of goods and has been cheating the general public by promising them very high commissions/incentives through simple enrolment of new members and by claiming that these commissions/incentives would continue in perpetuity,” ED said in a note.
Quite a few FIRs have been registered by Telangana Police under various sections of IPC against Amway and its directors. Metropolitan Sessions Judge cum Special Court (PMLA), Hyderabad, has taken cognizance of the prosecution complaint on Monday.
The ED said its investigation revealed that” Amway has been promoting a Pyramid scheme in the guise of direct selling. Instead of selling goods directly to the end consumer, Amway has floated a multi-level marketing scheme of members and has introduced many intermediaries in the name of distributors. The scheme does not focus on the sale of products but survives primarily on enrolling members. Once a newcomer is convinced to pay money through someone who has referred him to the company, he/she becomes a representative and to earn commission.”
Amway issue a response. Its India Spokesperson said, “The Prosecution Complaint currently filed by the Enforcement Directorate pertains 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 from time-to-time. Since Amway began its operations in India 25 years ago, it has been committed to legal and regulatory compliance, and has diligently maintained a culture of compliance and integrity to the present day. We want to reiterate our continued confidence in the Indian legal and judicial system following the due process of law as we pursue our legal rights."
"Amway is proud of its rich history in India and will vigorously defend itself, as well as the over 2,500 employees and over 5.5 lakh independent distributors who are critical to its mission of helping people live healthier, better lives," he added.