Kerala orders probe into Amway chief's arrest

The Kerala government on Friday ordered a probe into the circumstances that led to the arrest of network marketing firm Amway India's chairman and CEO William S Pinckney, an American national.

Kerala minister Thiruvanchoor Radhakrishnan asked the South Zone ADGP Shanker Reddy to conduct an investigation into the circumstances that led to the arrest of the Amway chief by the state crime branch in connection with fraud cases registered against him.

A team of officials from Amway had met the home minister the other day and submitted a complaint about the arrest of their chief, official sources said.

In the backdrop of police action against Amway, corporate affairs minister Sachin Pilot had stated in Delhi on Thursday that the government is looking to remove the legal ambiguities to differentiate between fraudulent Ponzi schemes and genuine businesses run by "reputed and law-abiding" entities.

"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," he had stated.

Pinckney and directors Sanjay Malhotra and Anshu Budhraja were arrested by the Wayanad District Crime Branch (Economic Offences) wing from Kozhikode on May 27 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.

A local court in Waynad had granted conditional bail to Pinckney and the two company directors a day after their arrest.

The arrests were based on complaints filed in the Meppady police station by distributors Ashraf and Jaffer in Wayanad district.

The complainants accused the company of failing to ensure the promised benefits to those who joined the network marketing business. They alleged that the company had forced them to buy Amway products which included cosmetics and protein powder for huge sums of money