ED Attaches Amway India Assets Worth Rs 757.77 Crore; Know Why

New Delhi: The Enforcement Directorate (ED) on Monday provisionally attached assets worth Rs 757.77 crore belonging to Amway India Enterprises Pvt. Ltd. in a money-laundering case.

The FMCG firm, which sells health, beauty and home care products, has been accused of running a multi-level marketing scam.

According to officials of ED, attached properties include land and factory building at Tamil Nadu’s Dindigul, plant and machineries, vehicles, bank accounts  and fixed deposits.

Immovable and movable properties worth Rs 411.83 crore and bank balances of Rs 345.94 crore from 36 different accounts have been attached as a money-laundering investigation by ED revealed that Amway is running a pyramid fraud in the guise of direct selling multi-level marketing network.

“It is observed that the prices of most of the products offered by the company are exorbitant as compared to the alternative popular products of reputed manufacturers available in the open market,” ED said.

ED informed that the company collected Rs 27,562 crore from its business operations from FY 2002-03 to FY 2021-22, of which Amway India has paid commission amounting to Rs 7,588 crore to its distributors and members in India and in the USA.

“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. The commissions received by upline members contribute enormously in the hike of prices of products.”

Amway says matter dates back to 2011 investigation, requests caution

Reacting to the development, Amway said that the action of the authorities is with regards to an investigation dating back to 2011.

“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 company added that the recent inclusion of Direct Selling under the Consumer Protection Act (Direct Selling) Rules, 2021, have brought in 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.”

Amway stated that it 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.”

The company requested that caution be exercised, “considering a misleading impression about our business also affects the livelihood of over 5.5 lakh direct sellers in the country,” the company spokesperson said.