Delhi resident lodges police complaint against Amway India

More often than not, the apologists of Amway India say that Amway India is facing problems only in Andhra Pradesh but nowhere else in India. The critics even go to the extent of blaming one police officer who they claim to be holding a grudge against the company. It is proved wrong once again. Last year, the Kerala police filed criminal cases against Amway India arresting CEO and MD William Pinckney. Here is another instance to prove the critics wrong. This is time it is in the national capital New Delhi.

New Delhi (ANI) Direct marketing firm Amway India has been facing some tough times of late; and its troubles don't seem to be ending any time soon.  In the past year, the company and some of its key officials  have been charged with financial irregularities.

In  May last year, its chairman and CEO William S Pinckney and two directors were arrested by Crime Branch officers for violating various provisions of the Prize Chits and Money Circulation Schemes (Banning) Act, 1978.

And now, a Delhi resident has lodged a police complaint accusing Amway India of being involved in a scam allegedly worth over Rs.2000 crores.

According to the complainant, Kiran Pal, key officials of Amway India, including Pinckney and Chief Marketing Officer Sundeep Shah, allegedly adopted restrictive trade practices that resulted in misrepresentation, and the sale of inferior quality health, beauty and nutritional products.

In documents provided by Mr. Pal, he has claimed in his complaint that an Amway Enterprises Limited distributor lured him with the prospect of becoming an Independent Business Owner (IBO) and achieving complete financial independence.

According to the documents provided to the authorities, Pal has said his wife used one of Amway's eyeliner products, and thereafter, had to undergo costly medical treatment for burnt eye lids.

Based on Pal's complaint, the Civil Lines police station has issued a notice to the Amway India's offices in Sector 32, Gurgaon, seeking clarifications on the method of its operations, and details of agencies, if any, that verify Amway's products.

Amway India has not given a response or a statement with regard to this complaint, despite repeated attempts to contact them.

http://www.business-standard.com/article/news-ani/delhi-resident-lodges-police-complaint-against-amway-india-114031600236_1.html

Pinckney is not willing to execute the bail bonds for his release: Kurnool police. Amway keeping him in jail to bring pressure on Indian Govt for his release

The Kurnool District Court granted bail to CEO and MD of Amway India Enterprises, Mr William S Pinckney, more than a week back. But Amway India officials so far have not come forward to secure his release on bail. What could be the reason? 

The Amway India Enterprises’ counsels and the bosses of Amway in the USA have been attempting to bring pressure on the Indian Government to release Mr Pinckney unconditionally. The Amway officials appears to have felt that more time Mr Pinckney remains in jail, he could garner more sympathy. In order to increase the pressure on the Government they are keeping Mr Pinckney in jail. It is entirely the fault of the Amway authorities in making the CEO and MD of Amway India languish in jail.

Secondly, the District Court set as one of the conditions for bail that Mr Pinckney should surrender his passport to the court. The Amway authorities could not digest this condition. They pleaded that Pinckney has been living in the country for the last 16 years and he would not escape to other countries. The court did not agree to the contention and stuck to its position for the surrender of the passport.

In fact, the Nampalli Metropolitan Magistrate Court should have demanded the surrender of passport seven years back when a criminal case was filed against Amway India by the CID of AP. For reasons better known to the then judicial officer, there was no such demand.

At least this time, the district court of Kurnool set the condition. Once he surrenders the passport and fulfil the other conditions, he would be set free. Then only he could obtain bail from other courts including Warangal, Khammam, Hyderabad and other places.

Why Mr Pinckney is not willing to surrender his passport?

In the case, he is convicted and sentenced he might escape to the USA or Australia to avoid jail term. That is why the judicial court is demanding surrender of his passport.

That exactly is the point why the bigwigs of Amway from the USA are spreading canards that Pinckney was illegally detained and harassed.

In fact, he was legally arrested for indulging in a criminal activity and he could secure bail by fulfilling the conditions set by the judicial authorities.

Meanwhile, the journalist friends in New Delhi told Corporate Frauds Watch that Amway officials are seen moving in the lobbies of Parliament trying to impress upon the newly-elected members of Parliament for the release of Mr Pinckney.

Enforcement Directorate finds illegal siphoning of Rs. 8,000 crore by Amway India to USA

The Indian Enforcement Directorate authorities have found after a thorough investigation that Amway India has illegally siphoned out of the country Rs. 8,000 crore (Rs. 80 billion) to the USA. The Directorate has issued a show cause notice to Amway India Enterprises to that effect.

“The multilevel marketing company Amway India has siphoned out Rs. 8,000 crore from India illegally,” a top official of Enforcement Directorate said.

He also said that the Enforcement Directorate has been probing violations of Foreign Exchange Management Act (FEMA) indulged in by Amway India.

“We have issued show cause notice to Amway after completing the investigation. The violations regarding FEMA are being looking into for the repatriation of Rs. 8,000 crore in the past ten years, said the ED source.

The Corporate Frauds Watch has been raising the issue with the officials at various levels for the last several years that there were violations and the Amway India has been illegally siphoning out large scale funds from the country.

Amway India has been claiming that it is investing Rs. 500 crore for setting up a plant in Tamil Nadu. But the fact is that it has illegally siphoned out the funds up to Rs. 8,000 crore and Rs. 500 crore is just peanuts.

In the name of multilevel marketing, the fraudulent company has been milking the Indians. It is high time people realised the fraudulent activities of Amway India. The Corporate Frauds Watch estimated that Amway had siphoned out Rs 10,000 crore during the last 15 years of its existence in the country. Now the cat is out of the bag and the Central Government should take initiative to curb the illegal business activities of the multilevel marketing company.

Amway India enacting drama keeping Mr Pinckney in jail instead of obtaining bail

CEO and MD of Amway India Enterprises Mr William S Pinckney is still in jail. For reasons better known to the counsels of Amway India, they have not filed bail petitions in courts where the criminal cases were filed against the fraudulent company. In India, bail is  rule and jail is an exception. It appears that Mr Pinckney is enjoying his jail time with all the facilities he could buy in Indian jails. 
In the meanwhile, the Amway India unleashed a huge propaganda blitzkrieg in the media including electronic and print all over the country stating that Mr Pinckney was illegally 'detained'. It appears they do not know the meaning of detention or they do not make the difference between detention and arrest. No judicial court in India will send anybody, let alone an American-Australian citizen, behind bars without prima facie evidence. 
The latest is the article published in The Economic Times of India by the US-based chiefs of Amway. What these bigwigs conveniently forget is that India is an independent and democratic country and it has an independent judiciary. Unless there is prima facie evidence, no court in India will take cognizance of a crime and send the accused to judicial custody. 
As per the existing law of the land, the business Amway India Enterprises is doing in the country is illegal. The Andhra Pradesh High Court in its judgement based on the affidavit filed by Amway India itself regarding the business model of Amway, stated, "Inducement for aggressive enrolment of new members to earn more commission is inherent in the scheme – Scheme provides for sufficient inducements for its members to chase for new members to make quick  easy money – By promising payment of commission on the business turned out by down-line members sponsored either directly or indirectly by the up-line members constituting a contingency relative to enrolment of members, first petitioner (promoter) is earning quick / easy money from its distributors apart from ensuring its distributors to earn quick/easy money – The two ingredients are thus satisfied in the case of promoter too – Held that the scheme run by petitioners squarely attracts the definition of ‘Money Circulation Scheme’ as provided in Section 2(c) of the Act.. " 
As is evident from the contentions advanced on behalf of the petitioners as noted earlier, the petitioners have taken the stand that there is no quick or easy money involved in the scheme and that the money which the sponsor member gets does not depend on any event or contingency relative or applicable to the enrollment of the members into the scheme.  But on a careful analysis of the true nature of the scheme as explained above, it is quite apparent that one of the components of the income earned by a sponsor member is the commission which is calculated not only on the personal PV of the sponsor member, but also from the PV earned by all the remaining 102 members falling within his group.  There is, therefore, no gainsaying that a substantial part of the income which the first sponsor member of the group gets depends on the event or contingency relative or applicable to the enrollment of members into the scheme.  This conclusion can be tested by a further analysis of the income figures given in the earlier paragraph.  Supposing the sponsor member at the top does not introduce any member and if he merely sells the products given to him, he gets an income of Rs.12,420/-.  If he sponsors only six people and they in turn do not sponsor any member, then he will get an additional income of Rs.23,760/-.  If those six members whom he sponsored again sponsor four members each, he will get a further income of Rs.1,14,480/- and if the 24 members sponsor three members each, he will get a further sum of Rs.6,83,300/-.  Thus the money which the member at the top of the line gets depends upon the members whom he enrolls or the members enrolled by him enroll. (Para 28).

When the judgement is crystal clear that the company is making easy and quick money in the name of selling products, the American operators have been time and again stating that their business model is legal. The Amway may be running in several countries where there is no law banning illegal money circulation scheme. But in India, there is a law which prohibits illegal money circulation schemes. 

Let us look at Section 2 (c) of PCMCS Act, 1978. "Section 2 (c) “money circulation scheme” means any scheme, by whatever name called, for making of quick or easy money, or for the receipt of any money, or valuable thing as the consideration for a promise to pay money, on any event or contingency relative or applicable to the enrolment of members into the scheme, whether or not such money or thing is derived from the entrance money of the members of such scheme or periodical subscriptions: 

The law clearly says 'for the receipt of any money, or valuable thing as the consideration for a promise to pay money". Here valuable thing is the product which Amway is offering to its members. There is no ambiguity in the law. The American businessmen are spreading canards time and again that the law is ambiguous. 

The long article published in The Economic Times of India has conveniently skips the High Court judgement which pronounced the business model of Amway is illegal. They also do not mention that the Supreme Court of India also upheld the judgement of High Court after Amway India filed a special leave petition in the apex court.

Why there is a hue and cry when a criminal on a proven charge of running illegal money circulation scheme is arrested? There are asking for the release of Pinckney as if he was detained illegally. They could simply file a bail petition and walk out of the jail. But they are enacting a drama to gain sympathy. 

If anybody wants to do business in any country, they have to respect the law of the land and do their business accordingly. If anyone acts against the law, he or she will be arrested and put behind bars.

Just go through this article published in the Economic Times of India to know how the American heads of Amway are distorting the facts in the criminal case.

http://economictimes.indiatimes.com/news/international/business/amway-urges-
government-to-help-secure-release-of-its-india-head/articleshow/36849102.cms

Amway urges government to help secure release of its India head 

Amway India's CEO Bill Pinckney was arrested on May 26 at Amway's headquarters in 
Gurgaon. At the time of this writing, he remains in police custody. This continued 
detention and harassment must end. Amway is a reputable company with 55 years of 
operating legally and ethically in more than 100 countries and territories 
worldwide. 
And while the newly elected Union government in New Delhi played no role in this 
police action, we ask their help with the immediate release of Bill so he can be 
quickly and safely return to his family. To continue with this investigative 
retention when we have fully cooperated with all investigations and requests from 
authorities in India - including Andhra Pradesh - is unnecessary and unreasonable. 
Whenever our business model has been questioned, we have shown up to provide 
answers. We have made every effort to be entirely transparent and forthcoming with 
authorities. If there is a problem, we want to fix it so we can continue to do 
business in India. 
The underlying issue at hand is the lack of clear direct selling regulations that 
distinguish legitimate businesses like Amway from dishonest ones. 
Additionally, provisions of the Prize Chits and Money Circulation Schemes 
(Banning) Act seem to be misapplied against Amway. An amendment to this Act - or 
even new legislation - is something we have been working toward for some time. 
Hopefully, these recent events call greater attention to the immediate need for 
fair and balanced direct selling legislative guidelines. Fortunately, the newly 
sworn in Modi government's probusiness agenda is actively working to create an 
environment that will welcome foreign direct investment. This makes us hopeful we 
will be able to collaborate with them to find solutions that work for everyone. 
With similar situations in other markets in the past, we have successfully worked 
alongside government officials to resolve issues and we feel confident we can do 
the same here. 
Since opening in 1998, we have seen firsthand the potential this market holds. 
Amway India has grown into one of the top 10 global markets for the company, 
selling more than 140 high quality products - most of which are manufactured in 
India. We employ close to 500 people and have more than 550,000 distributors 
across the country. Our philanthropic efforts in India have helped nearly 100,000 
children including visually challenged students in in need of educational and 
vocational tools. 
Amway is not alone in seeing the opportunity in India. The World Federation of 
Direct Selling Associations brought industry CEOs to India earlier this year to 
learn about doing business here. They too saw this potential firsthand and left 
feeling excited about their prospects for the future. Events like this however, 
may cause them to rethink investing in the Indian market. 
Despite the challenges we currently face, we remain firmly committed to doing 
business in India. We will not abandon the hundreds of employees and hundreds of 
thousands of distributors who are working to build businesses for themselves and 
their families. In fact, we will continue to expand our investment in India in 
many ways. This includes a new USD $100 million state-of-the-art manufacturing 
facility in Tamil Nadu. Our goal is to help Indian citizens reach their potential 
through a business of their own. When we say we're committed to their success, we 
mean it. 
To be clear, our top priority is the immediate release of Bill. We will continue 
to answer any questions any person may have about our business. And we stand ready 
to work with India's new Union government to develop clearer direct selling 
legislative guidelines to ensure events like this never happen again. 
(The authors of this article are Amway Chairman Steve Van Andel and President Doug 

DeVos)  

Pinckney’s statement proved the crime: Dr K Raghuram Reddy

Superintendent of Police Dr K Raghuram Reddy said that the interrogation of the managing director and CEO of Amway India Enterprises William Pinckney has betrayed the business model of the fraudulent company which is nothing but an illegal money circulation scheme in the name of selling products 'directly' to the consumers.

The SP said that the CEO has stated that there was payment to the upline members proving beyond reasonable doubt that there was sponsoring of members into the scheme. Section 2 C of Prize Chits and Money Circulation Schemes (Banning)Act specifically prohibits sponsoring of members. Section 3 prohibits enrollment of members into the scheme, he added.

He said that William Pinckney has admitted during interrogation that Amway India has paid Rs 620.59 crore for the year 2011-12 as commission to the upline members in the chain link scheme of Amway. For the year 2012-13, Amway has paid Rs 621.86 crore as commission and for 2013-14 the company has paid Rs 569.10 crore to the upline members in the chain scheme.

The managing director and CEO of Amway has also admitted that Amway has received Rs 33.4 crore for 2010-11 through renewal of membership fee, Rs 40.2 crore for 2011-12 and Rs 40 crore for 2012-13, the SP said. “The AP High Court pointed out that the collection of renewal membership is nothing but easy and quick money earned by Amway,” he added.

The total sale of products was Rs 1838 crore for 2010-11, Rs 2150 crore for 2011-12 and Rs 2191 crore for 2012-13, according to the statement signed by the Amway MD.

Referring to the gross profit of Amway, Pinckney said that Amway earned a gross profit of Rs 437.6 crore for 2011-12, Rs 478.8 crore for 2012-13 and Rs 304.7 crore for 2013-14.

Pinckney has also admitted that the annual advertisement budget for Andhra Pradesh alone was Rs 2.3 crore for the current financial year.  

Pinckney to spend some more time in Indian jails

It has been twelve days since managing director and CEO of Amway India Enterprises William Scott Pinckney was taken into custody by Kurnool police. Since then he has been spending his time hopping from jail to jail in the two states of Telangana and Andhra Pradesh. It appears that it would take some more weeks before he secures bail to get released from the jail. There are multiple criminal cases filed against the accused on the charges of indulging in illegal money circulation scheme in the name of selling products.

Any police officer who has a look at the Andhra Pradesh High Court will never think twice to register the criminal case against Amway India. The judgement is well-written and highlights the intelligence of the Indian judges in analysing a racket designed by Amway to loot the gullible people all over world.

Nowhere in the world were criminal cases filed against Amway. It surely is the efforts of an untiring IPS officer VC Sajjanar, who unearthed the racket and brought the culprit to book.

Earlier, he unearthed the racket of Japan Life and Wonder World racketeering. However, whenever he arrested the guilty, the accused used to say that why the police are not taking action against Amway which is following the same business model.

As soon as he assumed charge as the superintendent of police of Economic Offences Wing, VC Sajjanar arrested the kingpins of Amway India and booked criminal cases against the company and its director-members. The rest is the history.

Home Secretary appealed to form SIT to probe Amway illegal business

To                                                                                                                   Dated: 6/6/2014

The Principal Secretary,

Home Department, Secretariat,

Telangana State, Hyderabad.

Respected Madam,

Sub:    Promotion of illegal Money Circulation Scheme by Amway India Enterprises – Request to initiate criminal action by forming Special Investigating Team (SIT) – Regarding.

Ref:     G.O.Ms.No.178 Home department, dated 15/9/2008 of State Govt. of A.P.

****

1.         It is respectfully submitted that Amway India Enterprises has been promoting illegal Money Circulation Scheme in the guise of sale of products. The Division bench of Hon’ble High Court of A.P. (WP 20470 of 2006) also held that the scheme of Amway is nothing but illegal Money Circulation Scheme banned under the provisions of Prize Chits and Money Circulation Schemes (Banning) Act, 1978. The Hon’ble Supreme Court of India (SLP 13414 of 2007) also upheld the judgement of the Hon’ble High Court of AP in this regard.

2.         It is further submitted that the State Government of A.P. issued a G.O. cited in the above reference, restraining the Amway India Enterprises from issuing advertisements in Print and Electronic Media. Amway has been issuing advertisements in all the Print and Electronic Media in utter disregard of the said G.O., though no action is being initiated against Amway in this regard.

3.         It is further submitted that the fraud, cheating and siphoning of amounts to foreign countries committed by Amway is above Rs.1000 Crore and the activities of Amway extended across the state. Hence, it needs a special investigation by Special Investigating Team (SIT) to curb the social menace of illegal Money Circulation Scheme promoted by Amway India Enterprises.

4.         Hence, I pray that the Hon’ble Officer may be pleased to form a Special Investigating Team (SIT) headed by D.I.G. of Police for thorough and effective investigation to curb the promotion of illegal Money Circulation scheme by Amway India Enterprises.

Yours faithfully,

M V Shyam Sundar

To                                                                                                                   Dated: 6/6/2014

The Commissioner of Police,

Hyderabad City,

Hyderabad.

Respected Madam,

Sub:    Promotion of illegal Money Circulation Scheme by Amway India Enterprises – Request to initiate criminal action by forming Special Investigating Team (SIT) – Regarding.

Ref:     G.O.Ms.No.178 Home department, dated 15/9/2008 of State Govt. of A.P.

****

1.         It is respectfully submitted that Amway India Enterprises has been promoting illegal Money Circulation Scheme in the guise of sale of products. The Division bench of Hon’ble High Court of A.P. (WP 20470 of 2006) also held that the scheme of Amway is nothing but illegal Money Circulation Scheme banned under the provisions of Prize Chits and Money Circulation Schemes (Banning) Act, 1978. The Hon’ble Supreme Court of India (SLP 13414 of 2007) also upheld the judgement of the Hon’ble High Court of AP in this regard.

2.         It is further submitted that the State Government of A.P. issued a G.O. cited in the above reference, restraining the Amway India Enterprises from issuing advertisements in Print and Electronic Media. Amway has been issuing advertisements in all the Print and Electronic Media in utter disregard of the said G.O., though no action is being initiated against Amway in this regard.

3.         It is further submitted that the fraud, cheating and siphoning of amounts to foreign countries committed by Amway is above Rs.1000 Crore and the activities of Amway extended across the state. Hence, it needs a special investigation by Special Investigating Team (SIT) to curb the social menace of illegal Money Circulation Scheme promoted by Amway India Enterprises.

4.         Hence, I pray that the Hon’ble Officer may be pleased to form a Special Investigating Team (SIT) headed by D.I.G. of Police for thorough and effective investigation to curb the promotion of illegal Money Circulation scheme by Amway India Enterprises.

Yours faithfully,

M V Shyam Sundar

IDSA's demand ridiculous: Follow Indian laws to do business in country

Indian Direct Selling Association (IDSA) has been demanding amendments to the Prize Chits & Money Circulation Schemes (Banning) Act, 1978 to enable the members of IDSA to loot the people of India without any let or hindrance.

What a shameless demand! If anybody wants to do business in any country, they have to respect the laws of the land and follow them scrupulously. But these IDSA members are demanding something else. They want to circumvent the law of the land to continue their fraudulent business.

Practising High Court advocate Shaik Mastan Vali came down heavily against the demand of the Indian Direct Selling Association to amend the Prize Chits & Money Circulation Schemes (Banning) Act, 1978. “It is really ridiculous and brazen on the part of the IDSA to put forward such demand,” he said.

Referring to the Supreme Court judgment in Kuriachan Chacko case, he said that the honourable Supreme Court upheld action against such con companies under PCMCS Act and where was ambiguity in the enactment and necessity for amendment of the same.

The next demand would be to do away with the Section 420 of Indian Penal Code as the Amway India was also booked under the provisions of that Section, he averred.

Earlier, IDSA demanded guidelines for undertaking direct selling of the products of its member-companies. Later, when it was proved that the guidelines prepared by the Kerala Government were not of much use for the continuance of their fraudulent business, now they are demanding amendments to the PCMCS Act and if possible they demand repeal of that enactment.

For the last three and half decades, it has been proved a good weapon against the illegal money circulation schemes undertaken by the fraudsters and tricksters.

IDSA claimed that the charges framed against the Amway India are frivolous and are giving misleading impression about its business activities.

What they conveniently try to sweep under the carpet is that the Andhra Pradesh High Court has already delivered its judgment about the business model of Amway stating it attracted the provisions of the PCMCS Act. Later, the Supreme Court also upheld the judgment, the High Court advocate, who filed a Writ of Mandamus on behalf of Corporate Frauds Watch in the AP High Court demanding implementation of GO 178/2008 issued against Amway India Enterprises in the past, pointed out.

Generally, victims seek investigation by agencies like CID or CBI. But strangely, these companies are seeking investigation by such agencies only to prolong period of investigation to continue their fraudulent activities.

To drive the point home, Mastan Vali recalls the demand by NMart to transfer investigation of the criminal case against the company to the CID. The statistics shows that the average period the CID takes to complete investigation into a criminal case is ten years whereas it is only six months in a law and order police station. This reason is enough for the fraudsters to put forward their demand to transfer the case to the CID or CBI where over 10,000 cases are pending investigation.