Amway India CEO arrested again

Moneylife Digital Team 27 May 2014

Based on a case filed in Kurnool, the Andhra Pradesh police took the CEO of Amway India into custody from the company headquarters 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.

Last year in May, Crime Branch officials of the Kerala police arrested Amway India’s the then managing director and CEO Pinckney and two directors, Anshu Budhraja and Sanjay Malhotra of the multi-level marketing (MLM) company for alleged money laundering and breach of trust. The arrests were made under the Prize Chits and Money Circulation Schemes (Banning) Act 1978 (PCMCS Act), which only goes to prove that the Act is not as toothless as various state governments have liked to claim.

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.

There are on-going cases against Speak Asia and Amway, to cite two examples.

Comments

User

MOHAN

1 decade ago

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It is an oft-repeated lie of chain-money companies that they are operating in many countries around the world for the last several years. But these Ponzi companies never reveal the list of the countries where they are doing business and/or since when they have started business in these countries.

Anand Mohan

Replied to MOHAN comment 1 decade ago

But the question is what cheating has been done by Amway so as to warrant the arrest of its Chief right away. Is it not injustice to a foreigner that he is being arrested in multiple FIRs on same cause of action so that he does not come out of jail. Just think, an Indian goes to foreign country on assignment and being booked under several FIRs for same offence. His relatives will be helpless even to meet him. After all what is the offence committed by Amway and who has done the cheating , is it the chief or some local person, this is the moot point.

MOHAN

Replied to Anand Mohan comment 1 decade ago

India is not a banana republic.

Police cannot register an FIR against an "innocent" foreigner, especially against a US citizen

Under any circumstance Govt. cannot allow Chain - money activities of a foreign or domestic ponzy company

yamuna

1 decade ago

Amway's concept is as similar as purchasing products from supermarket. There is no any joining fee. If you like to use quality products then by just giving your address/ID proof & Bank account you can be a distributor & can purchase products from Amway. If you don't like the quality then you can return even after using the product upto 30% within 30 days. No body pressurize you to build a network.

Building a team/Network is optional. It is as simple as we watch a movie & refer all our friends to watch the movie. When a group of people are purchasing the products then company is getting turnover & giving you some profit. There is nothing wrong.

If Amway would have been a Ponzy scheme then they will never invest Rs. 500 Cr. in INDIA (Tamilnadu) to establish their Company.

If really Indian Police wants to do something then please find out "How money Circulation is going on in IPL?"

Amway is operating in 108 countries for the last 55 years.
Let's don't make our self fool by arresting such a Healthy Business People. Its a shameful step from Indian (Specially Andhra & Kerala) Police. There are lot of Illegal Chit funds companies as well as individual people running chit funds in Andhra Pradesh. Is there any honest Police Officer is there to Ban all the illegal chit fund companies?

makkallalakshminarayana

Replied to yamuna comment 6 years ago

How foolish people are? We bargain in local Raitubazaars to purchase vegetables but the same are ready to buy a shampoo for 350/- in Amway. And the comission he get back on purchasing it goes to all who are in upstream. Just common sense

sendmail.pvs

Replied to makkallalakshminarayana comment 6 years ago

Yes you are foolish. Any product sold in anywhere in the world they get a commission. That is common in any industry /business. what is new you are telling. You buy a smartphone through amzon / flpkart, there is an intermediatery who earns commission and they are called dealers/distributors. who sells insurance without commission. This is simple commonsense. Its pity on the education system that people still are illiterates even after getting a degree. what is your problem?

MOHAN

Replied to yamuna comment 1 decade ago

Yamuna, you said "Amway is operating in 108 countries for the last 55 years"

Please let me know the name of the 108 countries and the date of beginning of "operation" in each country

MOHAN

Replied to yamuna comment 1 decade ago

Yamuna, you said "Amway is operating in 108 countries for the last 55 years"

Please let me know the name of the 108 countries and the date of beginning of "operation" in each countries.

naresh1.amway

Replied to MOHAN comment 6 years ago

https://www.amwayglobal.com/wp-content/uploads/2017/06/Amway-Profile2017.html

sendmail.pvs

Replied to MOHAN comment 6 years ago

Mohan, if I show you 100+ countries where Amyway is present, Are you ready to apologise for your comments.

Anand Mohan

1 decade ago

In this connection the direct sellers association may contact the govt of new states Telangana/Seemandhra which are going to be formed on 2.6.14 to immediately decide at the highest levels whether Amway is a ponzi scheme. No innocent person must be incarcerated. Further, an application under sec.438 of the Cr P C may simultaneously be made before Hon’ble Hyderabad High Court seeking blanket anticipatory bail as it is apprehended that the police may slap such cases in other districts and may create hurdles in his release.

Abhishek Sharma

1 decade ago

In 1993 Amway submit the legal document to Indian government, The government finally approved Amway operation in 1998. In these 5 years Indian government consulted several auditors Lawyers and other experts on Amway business model before finally approving Amway’s direct selling business. The Central Govt. has approved its investments and operations upholding its legality. Most of actions against Amway has been initiated by state police clubbing it with fly by night operators due to lack of suitable laws governing direct selling in India.

Dev

1 decade ago

Union Government must immediately expel Amway CEO William Scott Pinckney from India.

Divender Jarial

1 decade ago

By arresting Amway CEO, it has been proved by Indian Authorities that no foreign company should invest their time and resources in India. Dev Singh

Surya Prakash

1 decade ago

In fact easy money cannot be made in Amway business(most people say it as Scheme)....No joining fee and 3o days return policy even product was used upto 33%..makes satisfaction to ABO and even customer too.And this business is not Pyramid scheme .. & income comes purely from product selling only..Expansion of business with team is purely option.. finally there is no chance of losing money..by doing Amway business....

MOHAN

Replied to Surya Prakash comment 1 decade ago

blah-blah

Srini

1 decade ago

I would request Money life to be discussed on the Tupperware India' and IDSA's harassment on their Consulatants through the distributors.Many unethical practices are following by them.IDSA trying to favour all these MLMs at any cost.They are not taking any case seriously because there is no need to report to any Ministry.First All these to be bring under Government's RBI or SEBI's Umbrella or Minsitry of Companies.

All these are happening by IDSA Only and their encouragement to these kind of companies.

MOHAN

1 decade ago

Thank God Sachin Pilot is no more our Corporate Affairs Minister.

Sachin Pilot made us believe that Amway was a "law abiding firm" !!!

Read:

Amway arrest worries Pilot:

http://www.telegraphindia.com/1130530/js...#.U4RJp_mSyaQ

MOHAN

1 decade ago

Well done Andhra Police!