Assets worth over Rs 757 crore belonging to multi-level marketing (MLM) scheme promoting company, Amway India, have been attached under the anti-money laundering law, the Enforcement Directorate said on Monday, April 18. The provisionally attached properties of Amway India Enterprises Pvt. Ltd. include land and factory building at Dindigul district in Tamil Nadu, plant and machineries, vehicles, bank accounts and fixed deposits, the ED said in a statement.
Out of the total Rs 757.77 crore of assets attached under the Prevention of Money Laundering Act (PMLA), immovable and movable properties are worth Rs 411.83 crore while the rest are bank balances of Rs 345.94 crore kept in 36 accounts belonging to Amway, it said. The federal agency 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 is quoted to have said.
Responding to the issue in a statement, Amway 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. 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."
"As the matter is subjudice, 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,” it added.
In December last year, to protect consumers, the Union government banned direct selling companies like Tupperware, Amway and Oriflame from promoting pyramid or money circulation schemes, as it notified new rules for the industry to be complied with within 90 days. The government had said at the time that after the new rules were implemented, such companies will also be liable for the grievances arising out of the sale of goods or services by its direct sellers.
The Consumer Protection (Direct Selling) Rules, 2021 also said that state governments will have to set up a mechanism to monitor or supervise the activities of direct sellers and direct selling entities.
With PTI inputs