Based on a case filed in Kurnool, the Andhra Pradesh police took the CEO of Amway India into custody from the company headquarter at Gurgaon
William Scott Pinckney, chairman and chief executive (CEO) of Amway India has been again arrested by police. This time, he is arrested by Andhra Pradesh police, says a report in The Hindu Business Line.
Based on a case in Kurnool, a police team from the town took the top executive into custody in Gurgaon, the company's corporate headquarters, the The Hindu Business Line report added.
Andhra Police said that the arrest has been made based on a case filed by a lawyer alleging unethical practices followed in money circulation and product selling and under pertinent laws.
In a statement issued on 28th May, Amway India, said, "In an interesting and curious sequence of events, the AP Police re-arrested William Pinckney and started moving him from Kadapa jail to Khammam jail even before the outcome of the bail hearing in Kurnool. This movement was basis another frivolous FIR lodged in Khammam some days ago. Subsequently, in the evening, the bail application of William Pinckney was denied by the Kurnool court. We will now approach the sessions court."
"We maintain that the allegations mentioned in the FIRs are frivolous and give a misleading impression about our business. We had no prior information about the FIR which was filed way back in December 2013," Amway India added.
Moneylife and Moneylife Foundation have always said that Amway and several other multinational chain-schemes do fall foul of the PCMCS Act and there are clear high court judgements to this effect.
The fact is there has been plenty of litigation on the issue, precisely because various authorities consider that the operations are illegal under the PCMCS Act of 1978. Moneylife Foundation
, an NGO working towards spreading financial literacy, has repeatedly warned people about falling for MLM and pyramid companies with innumerable examples of losses incurred. Moneylife Foundation sent a representation to the prime minister, finance minister, governor of RBI and SEBI.
A set of powerful MLMs, which are part of an exclusive closed club, called the Indian Direct Selling Association or IDSA (on the lines of the Direct Selling Association of the US) has been lobbying hard to make a distinction between their operations and those of others, who they call, fly-by-night operators such as Speak Asia and Ad Magnet. In fact, the tens of thousands Ponzi/ double-your-money schemes that exploit poor financial literacy cause the biggest losses to Indians across the economic spectrum today.
Amway can be at best a source of pocket money
Senior Amway representatives had met Moneylife to clarify their views on Amway. Richard N Holwill and Rajat Banerjee , who met us, admitted that although some distributors tend to go overboard in pitching the scheme, income from being a distributor of Amway can, at best, be a source of additional income or pocket money for most people. It is not the pathway to riches as MLM companies make it out to be. However, Amway also insisted that there is no longer any joining fee and the model does not necessarily require enrolment of distributors. However, there was no answer to expensive nutraceuticals being prescribed by doctors, whose wives or relatives were Amway agents.
In India, AP was the first state to enact a law to ban money circulation schemes in 1965. Both the Supreme Court and several high courts have passed landmark judgements against the operation of these schemes as they violate the law of the land and are detrimental to the interests of the public.