Friday, 9 April 2010

India is the only country where the judicial courts held Amway operations illegal

The business that is Amway came out as a book long ago, 1985 (Amway: The Cult of Free Enterprise, Steve Butterfield). Around the time it entered India, 98/99, another had exposed it succinctly (Amway Motivational Organisations : Behind the Smoke and the Mirrors, Ruth Carter). That it could make its entry when information was readily available about its operations in China in the preceding years, flattened sales in N America with the advent of Internet, fall of their Diamonds, internal wars, legal battles, etc, a very bad history, is perplexing. Also, there in nothing in the Government records to show approval of its basic activity, it enrolled the Indian public in several hundred thousand. The wreck caused by Amway world over seen at a few clicks is astounding. There is no substance in what is doled out by Amway, world class products, fifty years, some thirty countries, direct sales and so on. A deeper look, these speak against, not for. Only six billion dollar global sales for a 50 year enterprise with only 1billion from its own land ! This should have been an eye opener.
Ramjee Chandran posed the right questions straight away to the Amway India officials in the initial stages and got insipid replies ("With soap in their hands and hope in their hearts", Bangalore Monthly Magazine July 1998 ). He showed Amway as a cause of “economic evil” and described the pitiful scene of uninformed and low income Indians investing their life savings in the “non-retailing” sales scheme in which 99% are doomed to lose.
The Amway India sales leveled off by 2002 itself at around Rs 700 crore (140 million dollars), an insignificant fraction of the global figure of 6 billion dollars. Despite trying out several strategies, it has not been able to make any significant progress and make a real foray into the Indian market. The reasons are obvious, extremely abnormal prices, and alternatives of the same kind available aplenty. For Amway, India is not China to expect similar sales (2 billion dollars). The figures are close and quibbling wouldn’t alter the situation.. The periodical press statements are for consumption of those who cannot get at the truth.
But whatever sales it has pushed through has affected innumerable lives. The havoc particularly in the state of Andhra Pradesh (AP) where it led to police action by vigilant officers has been excellently covered by CNN-IBN and i-news channels and the Hyderabad magazine, 'Pelli Patrika'. The A P High Court Judgment detailed how Amway India’s operations attract the provisions of the Indian law. With the Supreme Court dismissing the appeal, it should have closed down. What holds good in this state holds all over India. But that is not to be expected of Amway. With the Government yet to take action and the help of a number of local cohorts coming by, it continues the game. It can weave its way through, not a big effort for an enterprise that has been described as a state sponsored export of fraud, that it works like a mafia, a para-religion, a cult and so on.
As regards people continuing to fall a prey, the remarks of Paul Klebniov (Forbes, Dec 9, 1991) resound: Amway is rooted in principles deeply rooted in human nature. It’s only general awareness that can remedy the situation as in the case of any societal evil. The role of the media has been appallingly low. Some have stooped low for the sake of their benefit.
So it’s now left to a few conscientious lawyers to fight it out in the courts. The Prize Chits and Money Circulation Schemes (Banning) Act came into being in 1978 because of mushrooming of a number of chain schemes at that time. But today’s players are emulating Amway with some variants, making a fast buck before being caught. 'Run... law can hardly catch', appears to be their premise.
India is the only country where the courts have given verdict about the operations as illegal and asked the government to proceed with the required action on its part. There is some hope in this sense for those who have taken up the cause.
Uma Maheswara Rao Rupanagudi

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