The Enforcement Directorate (ED) on April 18 said it has attached assets worth Rs 757.77 crore belonging to Amway India Enterprises Pvt Ltd, which is accused of running a "multi-level marketing (MLM) scam".
The attached properties include land and factory building of Amway at Dindigul district in Tamil Nadu; plant and machinery vehicles, bank accounts and fixed deposits, the agency said in a statement.
"Immovable and movable properties worth Rs 411.83 crore and bank balances of Rs 345.94 crore from 36 different accounts belonging to Amway attached," it added, noting that the seizures have been made under the Prevention of Money Laundering Act (PMLA).
According to ED, the prices of most of the Amway products are “exorbitant as compared to the alternative popular products of reputed manufacturers available in the open market".
The agency claimed that the company, between FY2003 and FY2022, collected an amount of Rs 27,562 crore. Out of this, they paid a commission of Rs 7,588 crore to their affiliated members and distributors in the United States and India, it added.
“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,” ED said.
Amway's modus operandi, the agency alleged, is about aggressively propagating how the general public could become richer by becoming its member. The products it offers are used to cover up this "MLM pyramid fraud" by showcasing the company as a direct selling brand, it said.
“The action of the authorities is with regards to the investigation dating back to 2011 and since then we have been co-operating with the department and have shared all the information as sought for from time to time since 2011," Amway India said on April 19 while commenting on the development. "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," it added. "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."
"As the matter is sub judice, we do not wish to comment further. 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,” said Amway India.
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