Money-laundering investigation: ED attaches assets worth Rs 758 crore of Amway India

The Enforcement Directorate (ED) on Monday said that it has provisionally attached assets worth Rs 757.77 crore belonging to Amway India Enterprises. 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.

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 US during FY2002-03 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,” the ED said.

It said 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.

Amway has brought Rs 21.39 crore as share capital in India in 1996-97 and till FY2020-21, the company has 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.

“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 conducted mega conventions and flaunted their lavish lifestyle and used social media to lure gullible investors,” the agency said.

In a statement, Amway said the action of the authorities is related to the investigation dating back to 2011 and since then it has been cooperating with the department and has shared all the 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, 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,” the statement said.

“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 said.