ED attaches Amway's assets worth Rs 757.77 crore
Deccan Chronicle.| MOULI MAREEDU
Attached properties include land and factory building of Amway at Dindigul district, TN, plant and machineries, vehicles, bank accounts, FDs
The agency 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. (DC)
HYDERABAD: The Enforcement Directorate (ED) officials have attached assets worth Rs 757.77 crore belonging to Amway India Enterprises Private Limited, a company facing charges of involvement in a multi-level marketing scam.
The attached properties include land and factory building of Amway at Dindigul district, Tamil Nadu, plant and machineries, vehicles, bank accounts and fixed deposits. The agency 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 ED officials registered a money laundering case against Amway. During the probe, it was revealed that Amway was running a pyramid fraud in the guise of direct selling multi-level marketing networks. It was observed that the prices of most of the products offered by the company were exorbitant as compared to the alternative popular products of reputed manufacturers available in the open market.
Without knowing the real facts, the gullible public were induced to join as members of the company and purchase products at exorbitant prices and thus losing their hard earned money.
It was observed that the company collected an amount of `27,562 crore through its business operations from 2002-03 to 2021-22 and out of the above, the company paid commission of Rs 7,588 crore to its distributors and members in India and the USA during 2002-03 to 2020-21 financial year.
The entire focus of the company was about propagating how people could become rich by becoming members. There was no focus on the products. Products were used to masquerade this MLM pyramid fraud as a direct selling company. Amway brought Rs 21.39 crore as share capital in India in 1996-97 and till FY 2020-21, the company remitted a huge amount of
Rs 2,859.10 crore in the name of dividend, royalty and other payments to their investors and parent entities.
Britt Worldwide India Private Limited and 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. The promoters conducted mega conventions and flaunted their lavish lifestyle and used social media to lure gullible investors.
Responding to the ED's action, the Amway management released a statement that the action of the authorities was with regards to the investigation dating back to 2011 and since then they had been cooperating with the department and shared all information as sought 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, brought in the much- needed legal and regulatory clarity for the industry, while again confirming Amway India’s continuous compliance with, in letter and spirit, of all laws and regulations in India. As the matter is sub judice, we do not wish to comment further. We request you to exercise caution, considering that misleading impressions about our business also affect the livelihood of over 5.5 lakh direct sellers in the country," the Amway management said.