Sunday, 20 September 2009

It is nothing but lure to enrol more members into Amway fold

This is the comment part of the judgement of Andhra Pradesh High Court after carefully analysing the affidavit filed by Amway India itself appealing to the Hon'ble Court to declare its business model legal. On the contrary, Amway India received a rude shock. Just read it to find it for yourself.

It is, thus, evident that the whole scheme is so ingeniously conceived that the inducement for aggressive enrollment of new members to earn more and more commission is inherent in the scheme. By holding out attractive commission on the business turned out by the downline members, the scheme provides for sufficient inducements for its members to chase for the new members in their hot pursuit to make quick/easy money. On the part of the promoter by pushing each member to achieve the minimum sales worth Rs.2,000/- per month, (this sale includes enrollment of new members) he is assured of about Rs 1000 crore per annum. All this squarely satisfy the description of quick/easy money. In addition to this, it is an admitted fact that each person in order to continue to be the distributor, shall pay renewal subscription fee of Rs.995/- per annum. In para-11(b) of the counter affidavit on the admitted number of distributors of 4,50,000 this amount is calculated at about Rs.45 crores per annum. These figures are not denied by the first petitioner in its rejoinder. The plea of the first petitioner that there is no compulsion that a member shall renew his distributorship looks to us to be specious. Once a person becomes a distributor in a scheme of this nature where the sops in the shape of commission are so luring, it would be very difficult for a member to withdraw from their membership to avoid payment of the annual renewal subscription fee. (Para 34).
From the whole analysis of the scheme and the way in which it is structured it is quite apparent that once a person gets into this scheme he will find it difficult to come out of the web and it becomes a vicious circle for him. In any event the petitioners have not specifically denied the turnover they are achieving and the income they are earning towards the initial enrollment of the distributors, the renewal subscription fee and the minimum sales being achieved by the distributors as alleged in the counter affidavit. By no means can it be said that the money which the first petitioner is earning is not the quick/easy money. By promising payment of commission on the business turned out by the down-line members sponsored either directly or indirectly by the up-line members (which constitutes an event or contingency relative to enrollment of members), the first petitioner is earning quick/easy money from its distributors, apart from ensuring its distributor earn quick/easy money. Thus the two ingredients are satisfied in the case of promoter too. We are, therefore, of the considered view that the scheme run by the petitioners squarely attracts the definition of “Money Circulation Scheme” as provided in Section 2(c) of the Act. (Para 35).

1 comment:

dtytrivedi said...

ok i read that but did u know that amway had so many drop out rate, which are the facts mentioned in news press. This hasn't been judged by the court they themselves think that people will not go out of the business.

Now my answer to this statement is very simple, pls go this link where amway in its amagram issue has told that what is actually direct selling.

Did u know why Amway go the shosk because our government doesnt know what is the difference between genuine direct selling and pyramid schemes.

infact not only this act "Money Circulation Scheme” as provided in Section 2(c) of the Act. (Para 35)." U must be knowing that in couple of cases our law has been considered "OVERBURDENED, OUTDATED BY THE DEVELOPED COUNTRIES".
I have the proof of that but let me focus on this issue.

pls go this link

this is the fact (as u mentioned that rely on facts and only facts)
Our government don't know the difference.

Shyam think it that way the company is working in more than 80 countries. India is not the last one, Russia and Vietnam are the countries in which amway started its operations in 2005 and 2008.
And u know what in Russia amway is Amway is generating around $600 million compared to India which is around $250 million in 10 yrs.