Kozhikode (Kerala): Network marketing firm Amway India Enterprises Chairman and CEO William S Pinckney and two company Directors were arrested here on Monday on charges of indulging illegal money circulation scheme under the provisions of Prize Chits and Money Circulation Schemes (Banning) Act.
The two directors are Sanjay Malhotra and Anshu Budhraja, crime branch sources said.
The arrests were made on a complaint of a woman who claimed to have incurred loss through the network and on the basis of three cases registered against the company last year in Wayanad district, they said.
Police had questioned the trio earlier this month and had asked them to report again today for further questioning. They were arrested when they arrived at the police station.
Last year, the crime branch (economic offences) wing here had conducted searches at the Amway office at Thrissur, Kozhikode and Kannur as part of its crackdown on money chain scheme activities. Their godowns at these centres were closed and goods produced were also seized.
The searches were launched following a complaint lodged by Visalakshi of Kozhikode claiming that she had incurred losses.
William Pinckney is already facing a similar criminal case in Andhra Pradesh. The trial of the criminal case against Amway India has been going on in Chief Metropolitan Magistrate court at Nampally, Hyderabad for the last several years. Five more criminal cases are pending investigation in various police stations throughout Andhra Pradesh - Pattabhipuram police station, Guntur, Chikkadapalli police station, Hyderabad, Nacharam police station, Cyberabad, Governorpet police station, Vijayawada.
When criminal case was filed against Amway India, the company filed a writ petition in AP High Court and the in its judgement, the AP High Court held that the business model of Amway Indi Enterprises is illegal and attracted the provisions of Prize Chits and Money Circulation Schemes (Banning) Act, 1978. Later, the Supreme Court also upheld the judgement of AP High Court after the Amway India filed a special leave petition
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http://www.dnaindia.com/india/1841200/report-clearer-laws-on-tackling-fraud-schemes-soon-sachin-pilot-on-amway-issue
Clearer laws on tackling fraud schemes soon: Sachin Pilot on Amway issue
Wednesday, May 29, 2013, 21:53 IST | Place: New Delhi | Agency: PTI
They were booked under the Prize Chits and Money Circulation Schemes (Banning) Act based on complaints filed by distributors in 2011.
Corporate Affairs Minister Sachin Pilot today said the government will remove as early as possible the ambiguities in laws aimed at tackling fraudulent investment schemes.
Pilot's comments come against the backdrop of global direct selling firm Amway's India Chairman William S Pinckney and two company Directors being arrested by the Kerala police over allegations of fraud.
"We (Corporate Affairs Ministry) will work closely with concerned ministries and industries to remove the ambiguity in the law (related to tackling ponzi and other fraudulent schemes) as soon as possible," Pilot said.
Commenting on the Amway incident, he said that it "is disappointing that such an eventuality came about." Pinckney, Malhotra and Budhraja, who have been given conditional bail, were arrested by the Wayanad Crime Branch (Economic Offences) wing from Kozhikode in connection with three fraud cases registered in Wayanad district.
They were booked under the Prize Chits and Money Circulation Schemes (Banning) Act based on complaints filed by distributors in 2011.
"While steps should be taken to crack down on fraudulent companies running dubious investment schemes, companies that are reputed and abiding by the law must be delineated," the Minister said.
"Such events (like Amway) might negatively affect the prospects of our country as an attractive investment destination," he noted.
In the wake of Saradha fiasco in West Bengal, government has initiated a multi-pronged crackdown on companies running ponzi and fraudulent schemes besides making efforts to protect the interest of investors.
"While we take strong actions against ponzi schemes, we need to be careful not to create a vitiating atmosphere for reputed and law abiding companies," Pilot said.
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