"Pyramid Fraud": â‚¹ 750 Crore Of Consumer Goods Seller Amway India Frozen

The Enforcement Directorate accused Amway India of running a multi-level marketing "scam" where it focused on signing up new members so that senior staff could earn commission.

New Delhi: 

Assets worth over â‚¹ 757 crore belonging to direct-selling consumer goods company Amway India have been attached under the anti-money laundering law, the Enforcement Directorate said on Monday.

The provisionally attached properties of Amway India Enterprises Pvt Ltd. include land and factory building at Dindigul district in Tamil Nadu, plant and machinery, vehicles, bank accounts and fixed deposits, it said in a statement.

Attaching a property means it cannot be transferred, converted or moved.

Out of the total â‚¹ 757.77 crore of assets attached under the Prevention of Money Laundering Act (PMLA), immovable and movable properties are worth â‚¹ 411.83 crore while the rest are bank balances of â‚¹ 345.94 crore kept in 36 accounts belonging to Amway, it said.

The Enforcement Directorate accused the company of running a multi-level marketing "scam" where 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".

"A money laundering investigation by the ED revealed that Amway is running a pyramid fraud in the guise of direct selling multi-level marketing network," the agency said. Amway India is yet to respond to the charges.

"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," it added.

"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," the agency said.

CommentsThe government had banned direct selling companies from promoting pyramid schemes in December. The Consumer Protection (Direct Selling) Rules, 2021 were aimed at protecting consumers' rights and restricting companies which are involved in direct selling like Tupperware, Amway and Oriflame from encouraging money circulation schemes.

Courtesy : NDTV