CHENNAI: The Enforcement Directorate (ED) has provisionally attached assets worth Rs.757.77Crore belonging to Amway India Enterprises, a company accused of running a multi-level marketing scam. The attached properties include the land and factory building of Amway, plant & machinery, vehicles, bank accounts, and fixed deposits at Dindigul District in Tamil Nadu. ED had provisionally attached immovable & movable properties worth Rs 411.83 Crore and bank balances of Rs 345.94 Crore from 36 different accounts belonging to Amway.
ED has provisionally attached assets worth Rs. 757.77 Crore belonging to M/s. Amway India Enterprises Private Limited, a company accused of running a multi-level marketing scam.— ED (@dir_ed) April 18, 2022
A money-laundering investigation by the ED revealed that Amway is running a pyramid fraud in the guise of direct selling multi-level marketing network. The prices of most of the products offered by the company were found to be exorbitant as compared to the alternative popular products of reputed manufacturers available in the open market. The common public who joined as members of the company and purchased products at exorbitant prices were thus losing their hard-earned money. In reality, the commissions received by the upline members contributed enormously to the hike in prices of the Amway products.
As per the ED statement the company has collected an amount of Rs. 27,562 Crore from its business operations from 2002-03 to 2021-22 and out of above, the company has paid a commission of Rs. 7,588 Crore to its distributors & members in India and in the USA during FY 2002-03 to 2020-21.
The entire focus of the company was about propagating how members could become rich by becoming members with no actual focus on the products which were only used to masquerade the MLM Pyramid fraud as a direct selling company.
Amway has brought Rs. 21.39 Crores as share capital in India in 1996-97 and till F.Y 2020-21, the company has remitted a huge amount of Rs. 2859.10 Crore in the name of dividend, royalty, 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 the pyramid scheme of Amway by conducting seminars for joining members under the guise of sale of goods by enrollment of members in the chain system.
Amway Statement on ED Attachment of Assets
“The action of the authorities is with regards to the investigation dating back to 2011 and since then we have been co-operating 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 towards 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, have 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. 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, " Amway management said in a statement released on Monday.