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“Pyramid Fraud”: ED freezes assets worth ₹757 crore of Amway India in money laundering case

By Saima Siddiqui 
Updated Date

New Delhi: The Enforcement Directorate announced on Monday that assets worth over 757 crore belonging to Amway India, a direct-selling consumer products firm, had been seized under the anti-money laundering statute.

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Amway India Enterprises Pvt Ltd.’s temporarily attached possessions include property and a manufacturing facility in Tamil Nadu’s Dindigul district, as well as plant and machinery, cars, bank accounts, and fixed deposits, according to a statement.

When a property is attached, it cannot be transferred, transformed, or relocated.

Immovable and moveable properties are worth 411.83 crore of the total 757.77 crore of assets attached under the Prevention of Money Laundering Act (PMLA), while bank amounts of 345.94 crore are stored in 36 accounts belonging to Amway, it added.

The Enforcement Directorate accused the company of running a multi-level marketing “scam” where prices of most of the products offered by the company were “exorbitant as compared to the alternative popular products of reputed manufacturers available in the open market”.

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“A money laundering investigation by the ED revealed that Amway is running a pyramid fraud in the guise of direct selling multi-level marketing network,” the agency said.

“Without knowing the real facts, the common gullible public is induced to join as members of the company and purchase products at exorbitant prices and are thus losing their hard-earned money. The new members are not buying the products to use them, but to become rich by becoming members as showcased by the upline members. Reality is that the commissions received by the upline members contribute enormously in hike of prices of the products,” it added.

“The entire focus of the company is about propagating how members can become rich by becoming members. There is no focus on the products. Products are used to masquerade this MLM Pyramid fraud as a direct selling company,” the agency said.

Responding to the charges in a statement, Amway India said, “The action of the authorities is with regards to the investigation dating back to 2011 and since then we have been co-operating with the department and have shared all the information as sought for from time to time since 2011. We will continue to cooperate with the relevant government authorities and the law officials towards a fair, legal, and logical conclusion of the outstanding issues.”

A”s the matter is sub judice, we do not wish to comment further. We request you to exercise caution, considering a misleading impression about our business also affects the livelihood of over 5.5 lakh direct sellers in the country,” the company added.

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In December, the government made it illegal for direct selling organisations to promote pyramid schemes. The Consumer Protection (Direct Selling) Rules of 2021 were created to safeguard customers’ rights while also prohibiting direct selling corporations such as Tupperware, Amway, and Oriflame from pushing money circulation schemes.

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