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ED provisionally attaches assets worth Rs 757.77 crore belonging to Amway India

ED had provisionally attached immovable and movable properties worth Rs 411.83 crore and bank balances of Rs 345.94 crore from 36 different accounts belonging to Amway.

ED said that a money-laundering investigation by them revealed that Amway is running a pyramid fraud in the guise of direct selling multi-level marketing network. (Image: Facebook/Amway India)

The Enforcement Directorate (ED) on Monday said that has provisionally attached assets worth Rs 757.77 crore belonging to Amway India Enterprises Pvt Ltd. The investigating agency said that the attached properties include land and factory building of Amway at Dindigul District, Tamil Nadu, plant and machineries, vehicles, bank accounts and fixed deposits.

ED had provisionally attached 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 agency said that a money-laundering investigation by them revealed that Amway is running a pyramid fraud in the guise of direct selling multi-level marketing network.

“It is observed that the prices of most of the products offered by the company are exorbitant as compared to the alternative popular products of reputed manufacturers available in the open market,” the ED said.

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The investigating agency said that the company collected an amount of Rs 27,562 crore from its business operations from 2002-03 to 2021-22 and out of the above, the company has paid a commission of Rs 7,588 crore to its distributors and members in India and in the USA during FY 2002-03 to 2020-21.

“Without knowing the real facts, the common gullible public is induced to join as members of the company and purchase products at exorbitant prices and are thus losing their hard-earned money. The new members are not buying the products to use them, but to become rich by becoming members as showcased by the upline members. Reality is that the commissions received by the upline members contribute enormously in hike of prices of the products,” ED said.

It added that the entire focus of the company is about propagating how members can become rich by becoming members. “There is no focus on the products. Products are used to masquerade this MLM Pyramid fraud as a direct selling company,” it further stated.

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Reacting to the move, Amway India, via a statement, said: “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.”

They added: “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 has brought Rs 21.39 crore as share capital in India in 1996-97 and till FY 2020-21, the company has remitted huge amount of Rs 2,859.10 crore in the name of dividend, royalty and other payments to their investors and parent entities.

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“M/s. Britt Worldwide India Private Limited and M/s. Network Twenty One Private Limited also played a major role in promoting pyramid scheme of Amway by conducting seminars for joining members under the guise of sale of goods by enrollment of members in chain system. The promoters are conducting mega conventions and flaunted their lavish lifestyle and used social media to lure gullible investors,” the agency said.

First published on: 18-04-2022 at 03:18:25 pm
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