The Enforcement Directorate or ED has filed a prosecution complaint under
the Prevention of Money Laundering Act, 2002 against Amway India Enterprise Pvt
Ltd.
The complaint has been filed in the Court of the Hon’ble Metropolitan
Sessions Judge cum Special Court (PMLA) in Hyderabad, which took cognizance of
the matter on the same day.
The ED’s investigation stems from various FIRs registered by the
Telangana Police against Amway and its directors under different Sections of
the Indian Penal Code.
The allegations suggest that Amway engaged in promoting an illegal ‘Money
Circulation Scheme’ under the guise of selling goods, deceiving the public by
promising high commissions and incentives through simple enrolment of new
members.
As per the ED’s findings, Amway has been operating a pyramid scheme
masquerading as direct selling. Instead of focusing on the direct sale of goods
to end consumers, Amway introduced a multi-level marketing scheme with numerous
intermediaries in the form of distributors.
The scheme’s survival relies heavily on enrolling new members, with
commissions and incentives increasing for those higher up in the hierarchy.
The ED contends that Amway’s activities constitute a Multi-Level
Marketing Scheme and Money Circulation Scheme, leading to the generation of
proceeds of crime amounting to ₹ 4050.21 crore through the scheduled offence of
cheating.
Furthermore, the investigation uncovered that over ₹ 2,859 crore
collected from members was allegedly siphoned off and transferred to the bank
accounts of overseas investors, disguised as dividends, royalties, and other
expenses.
As part of the enforcement measures, the ED has attached movable and
immovable properties valued at ₹ 757.77 Crore in connection with this case.
The investigation is ongoing, and the ED continues to delve into the
complex financial dealings.
Amway’s Response
In response to the ED’s prosecution, Amway India issued a statement
through its spokesperson, addressing the investigation that dates back to 2011.
Amway 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.”
The company asserted its cooperation with the department, sharing all
required information throughout the process. The spokesperson reiterated Amway’s
commitment to legal and regulatory compliance, emphasizing a culture of
integrity and compliance since its establishment in India 25 years ago.
Amway expressed confidence in the Indian legal and judicial system,
pledging to follow due process and defend itself vigorously.
Despite the legal challenges, Amway remains proud of its history in India
and stands firm in its mission to support over 2,500 employees and more than
5.5 lakh independent distributors, aiming to contribute to healthier and better
lives for people across the country, it said.
The company said it affirms its dedication to pursuing legal rights while
navigating through the legal proceedings.
PTI
