Friday 17 December 2010

It's an open and shut criminal case against Amway India

India has enacted a very good legislation long back in 1978 to bring the culprits like Amway India to book. The enactment is Prize Chits & Money Circulation Schemes (Banning) Act, 1978. Earlier, the Government of Andhra Pradesh enacted a money circulation schemes banning act in 1965 followed by the Madhya Pradesh State Government and the Chandigarh Administration. However, the Union Government took initiative and enacted the all India legislation in 1978.

The enactment has effectively curbed the activities of the crooks who indulged in open money circulation schemes. However, after the Indian economy was opened to the liberalisation in 1990s, along with many legitimate companies who opened shop in the country, crooks like Amway made an entry with the promise of 'direct selling' for the benefit of the consumers. Sadly, the Indian authorities never asked them what is the directly selling method of Amway India. They presumably thought about the Indian direct selling method of weekly fairs in which the small and medium manufacturers bring their ware and sell directly to the villagers at reasonable prices.

But these crooks started a disguised money circulation scheme in the name of selling products. All these years they have only been lining their pockets. One police officer had correctly identified the activities of this crook company and he knew what enactment is applicable to file a criminal case against it.

Let us look at the Section 2 (c) of Prize Chits & Money Circulation Schemes (Banning) Act which gives the definition of money circulation scheme to understand the vision of our lawmakers.

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 enrollment 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;

Amway India calls its scheme 'direct selling'. The enactment says whatever name called, i.e. whether it is multilevel marketing, referral marketing, network marketing or direct selling, it is ultimately a money circulation scheme.

The enactment refers the term 'for making of quick or easy money. All these schemes are -intended to make quick or easy money. That is why Amway calls its model a good business opportunity to become rich in 2-5 years period.

The enactment also states 'for the receipt of any money or valuable thing as consideration for a promise to pay money'. Amway India relies on 'valuable thing' the products which are sold at an exorbitant prices.

The enactment also says that on any event, or contingency relative or applicable to the enrollment of members into the scheme. Amway India apologists cannot escape stating that there is no enrollment.

It also states another important ingredient, i.e., 'whether or not such money or thing is derived from the entrance money of the members of such scheme or periodical subscriptions'. Amway India apologists claim that the recruiters are not making any money from enrollment. But they cannot deny that they are making money from periodical subscriptions i.e., purchasing made by their downline.

So the criminal case against Amway India is an open and shut case. That is why these crooks are a worried lot about the criminal case.

Let us discuss the powers entrusted with the police in the next post.

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