After the Enforcement Directorate (ED) filed a Prosecution Complaint against Amway India under the Prevention of Money Laundering Act, the company said that it has been committed to legal and regulatory compliance. In a statement, a spokesperson from Amway 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,” the statement further said.
Earlier on Monday, the ED had said in a statement that it has filed a Prosecution Complaint under the PMLA, 022 against Amway India in the Court of Metropolitan Sessions Judge cum Special Court (PMLA) in Hyderabad. “The Hon’ble Court has taken cognizance of the Prosecution Complaint on 20.11.2023,” it said.
The move follows investigations into multiple FIRs filed by the Telangana Police against Amway and its Directors. These allegations include promoting an illegal ‘Money Circulation Scheme,’ under the guise of sale of goods and “has been cheating the general public by promising them very high commissions/ incentives through simple enrolment of new members and by claiming that these commissions/ incentives would continue in perpetuity”.
According to the investigation by ED, Amway has been operating a Pyramid scheme in the guise of direct selling, focusing more on recruiting members instead of selling goods directly to the end consumer. “The scheme does not focus on sale of products but survives primarily on enrolling of members. Once a newcomer is convinced to pay money through someone who has referred him to the company, he/she becomes a representative and to earn commission, he/she has to enroll new members and as the number of persons increases down the line, the ones on top get more commission and more incentives like luxurious tours,” it said.
Thus, the ED statement added, Amway has been operating a Multi-Level Marketing Scheme and Money Circulation Scheme has collected huge amounts from the subscribers. By commission of the scheduled offence of cheating, Amway has generated Proceeds of Crime totalling to Rs 4050.21 crore.
The ED investigation also revealed that more than Rs 2859 crore of money collected from the members has been siphoned off and parked in the bank accounts of overseas investors in the name of dividend, royalty and payments for other expenses. “During investigation, movable and immovable properties to the tune of Rs 757.77 crore have been attached by ED in this case,” it added.
While maintaining that the company is committed to legal and regulatory compliance, Amway spokesperson added, “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.”