Amway Faces Legal Action In Rs 4,050 Crore Alleged Money Laundering Case

The Directorate of Enforcement (ED) has filed a prosecution complaint under the Prevention of Money Laundering Act (PMLA), 2002 against Amway India Enterprise Pvt. Ltd. (Amway). The complaint has been filed in the Court of the Hon'ble Metropolitan Sessions Judge cum Special Court (PMLA) in Hyderabad, which took cognizance of the matter on the same day.

The ED's investigation stems from various FIRs registered by the Telangana Police against Amway and its Directors under different sections of the Indian Penal Code.

The allegations suggest that Amway engaged in promoting an illegal 'Money Circulation Scheme' under the guise of selling goods, deceiving the public by promising high commissions and incentives through simple enrolment of new members.

According to the ED's findings, Amway has been operating a Pyramid scheme masquerading as direct selling. Instead of focusing on the direct sale of goods to end consumers, Amway introduced a multi-level marketing scheme with numerous intermediaries in the form of distributors.

The scheme's survival relies heavily on enrolling new members, with commissions and incentives increasing for those higher up in the hierarchy.

The ED contends that Amway's activities constitute a Multi-Level Marketing Scheme and Money Circulation Scheme, leading to the generation of proceeds of crime amounting to Rs 4050.21 Crore through the scheduled offence of cheating.

Furthermore, the investigation uncovered that over Rs 2,859 crore collected from members was allegedly siphoned off and transferred to the bank accounts of overseas investors, disguised as dividends, royalties, and other expenses.

As part of the enforcement measures, the ED has attached movable and immovable properties valued at Rs 757.77 Crore in connection with this case.

The investigation is ongoing, and the ED continues to delve into the complex financial dealings.

Amway's Response

In response to the ED's prosecution, Amway India issued a statement through its spokesperson, addressing the investigation that dates back to 2011.

Amway India Spokesperson said, "The Prosecution Complaint currently filed by the Enforcement Directorate pertains to the investigation dating back to 2011 and since then we have been cooperating with the department and have shared all the information as sought from time to time. Since Amway began its operations in India 25 years ago, it has been committed to legal and regulatory compliance and has diligently maintained a culture of compliance and integrity to the present day. We want to reiterate our continued confidence in the Indian legal and judicial system following the due process of law as we pursue our legal rights. Amway is proud of its rich history in India and will vigorously defend itself, as well as the over 2,500 employees and over 5.5 lakh independent distributors who are critical to its mission of helping people live healthier, better lives."

The company asserted its cooperation with the department, sharing all required information throughout the process. The spokesperson reiterated Amway's commitment to legal and regulatory compliance, emphasizing a culture of integrity and compliance since its establishment in India 25 years ago.

Amway expressed confidence in the Indian legal and judicial system, pledging to follow due process and defend itself vigorously.

Despite the legal challenges, Amway remains proud of its history in India and stands firm in its mission to support over 2,500 employees and more than 5.5 lakh independent distributors, aiming to contribute to healthier and better lives for people across the country, it said.

The company said it affirms its dedication to pursuing legal rights while navigating through the legal proceedings.

(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)