ED attaches ₹757cr Amway India assets in fraud case

The Enforcement Directorate (ED) has attached assets worth ₹757.77 crore belonging to Amway India Enterprises Pvt Ltd, a popular direct marketing company that pretty much started the multilevel marketing(MLM) craze in India by enrolling lakhs of people as its members by offering them lucrative commissions on exorbitantly priced products, as long as they kept adding members below them.

In a detailed statement issued on Monday, ED said Amway India’s “entire focus is about propagating how members can become rich by becoming members”, not on the products. It said the products are used by (Amway) to pass off the MLM pyramid fraud as a direct selling company. The properties attached under prevention of money laundering act (PMLA) include land and a factory building of the company at Dindigul district, Tamil Nadu, plant and machinery, vehicles, bank accounts and fixed deposits.

The central agency has attached several immovable and movable properties worth ₹411.83 crore and bank balances worth ₹345.94 crore in 36 different accounts of Amway.

Amway India clarified that the investigation dates back to 2011 and claimed that its operations in the country now meet all regulatory requirements.

“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”.

“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 in the statement.

A money laundering probe against Amway, which has 5.5 lakh direct sellers across the country, was launched in 2011 on the basis of cases registered by Hyderabad police.

The probe revealed that Amway was running a pyramid fraud in the guise of a direct selling network.

ED has accused two other companies, Britt Worldwide India Private Limited and Network Twenty One Private Limited for playing a major role in promoting Amway’s pyramid scheme by conducting seminars where members are induced to join under the guise of sale of goods.

An email sent to Britt Worldwide remained unanswered. Network Twenty One representatives could not be located for comment.