HYDERABAD: The Enforcement Directorate (ED) has lodged a prosecution complaint in the court of Metropolitan Sessions Judge cum Special Court (PMLA), Hyderabad, under the Prevention of Money Laundering Act (PMLA), 2002, against M/s Amway India Enterprise Pvt. Ltd. (Amway). The court acknowledged the prosecution complaint on November 20.
The ED investigation began after multiple FIRs were registered by the Telangana police under Section 1860 of the IPC against Amway and its directors. The allegations are that Amway has been promoting an illicit ‘Money Circulation Scheme’ under the guise of goods sales, deceiving the public with promises of exorbitant commissions and incentives through simple enrollment of new members, claiming these rewards to be perpetual.
The ED’s probe brought to light that Amway has been advancing a pyramid scheme under the façade of direct selling. Rather than selling goods directly to consumers, Amway introduced a multi-level marketing scheme involving numerous intermediaries in the guise of distributors.
This scheme primarily thrives on member enrolment rather than the actual sale of products. Once a newcomer pays through a referrer, they become a representative, required to enrol new members. As the chain grows, those at the top receive higher commissions and additional incentives, such as luxurious tours.
Amway, through its MLM scheme and money circulation scheme, amassed a whopping Rs 4,050.21 crore by way of cheating. The ED’s investigation revealed that over Rs 2,859 crore collected from members was diverted and parked in the bank accounts of overseas investors, ostensibly for dividends, royalties and other expenses.
In the course of the investigation, movable and immovable properties totaling Rs 757.77 crore were attached by the ED. The agency has indicated that the inquiry is ongoing.
Firm response
Meanwhile, in response to the ED’s prosecution complaint, the spokesperson for Amway India issued a press statement. “The prosecution complaint filed by the ED pertains to the investigation dating back to 2011, and since then, we have been cooperating with the department, sharing all the information as sought from time to time. Since Amway began its operations in India 25 years ago, we have been committed to legal and regulatory compliance, diligently maintaining 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,” it read.
Rs 4,050.21 cr
Amway, through its MLM scheme and money circulation scheme, amassed a whopping Rs 4,050.21 crore by way of cheating, said officials. The agency has indicated that the inquiry is going on