On Monday, 18 April, the Enforcement Directorate informed that they have attached properties worth over 757 crores owned by Amway Enterprises Ltd, a company accused of running a multi-level pyramid scam.
ED has provisionally attached assets worth Rs. 757.77 Crore belonging to M/s. Amway India Enterprises Private Limited, a company accused of running a multi-level marketing scam.
— ED (@dir_ed) April 18, 2022
As per a report in ET, the attached assets include land, factories, plant machinery, bank accounts, vehicles and fixed deposits. While immovable/fixed assets are estimated to be up to Rs 411.83 crores, the bank balance and fixed deposits from over 36 different bank accounts make up to 345.94 crores.
The ED has accused Amway of running a pyramid fraud under the guise of direct selling multi-level marketing system. The land and factory buildings are located in Tamil Nadu’s Dindigul.
As per an India Today report, over a decade of its operations in India, from 2002-03 t 2021-22, Amway collected over Rs 27,562 crores and paid just over 7588 crores to its distributors and promoters in India and USA.
An ED statement regarding the recent action stated, “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. 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 ED has also stated that while selling overpriced products, Amway cheated the gullible public by assuring them that they can become rich very fast by becoming their member-distributors. Amway reportedly bought Rs 21.39 crores as share capital in India during 1996-97 and by 2020-21, it has remitted over Rs 2859.10 in the name of dividends, royalty etc.
The ED has also stated that the companies Britt Worldwide India Private Limited and Network TwentyOne Private Limited had also played a major role in helping Amway promote its pyramid scheme by organising seminars and enrolling new members in a chain system.
Amway’s CEO William Pinckney has been arrested once in 2013 and once in 2014 for running an alleged pyramid scheme in India.
