ED's investigation into Amway's MLM scan led to attachment of Rs 757 Cr

The Enforcement Directorate (ED) has provisionally attached assets worth Rs. 757.77 crore belonging to Amway India Enterprises Private Limited, a company accused of running a multi-level marketing scam.

By Newsmeter Network  Published on  18 April 2022 12:16 PM GMT
EDs investigation into Amways MLM scan led to attachment of Rs 757 Cr

Hyderabad: The Enforcement Directorate (ED) has provisionally attached assets worth Rs. 757.77 crore belonging to Amway India Enterprises Private Limited, a company accused of running a multi-level marketing scam.

The attached properties include land and factory building of Amway at Dindigul district in Tamil Nadu, plant and machinery, vehicles, bank accounts, and fixed deposits. ED had provisionally attached immovable and movable properties worth Rs. 411.83 crore and bank balances of Rs. 345.94 crore from 36 different accounts belonging to Amway.

The multi-level marketing network

A money-laundering investigation by the ED revealed that Amway is running a pyramid scam in the guise of direct selling multi-level marketing network. It was observed that the prices of most of the products offered by the company are exorbitant as compared to the alternative popular products of reputed manufacturers available in the open market. People are induced to join as members of the company and purchase products at exorbitant prices. "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 to the hike of prices of the products," the ED said.

ED also said that the company has collected Rs. 27,562 crore from its business operations from 2002-03 to 2021-22 and out of this, the company has paid a commission of Rs. 7,588 crore to its distributors and members in India and in the USA during the financial year 2002-03 to 2020-21.

The entire focus of the company is on 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 ED said.

Amway brought Rs. 21.39 crore as share capital in India in 1996-97 and till 2020-21, the company has remitted Rs. 2,859.10 crore in the name of dividends, royalty, and other payments to its investors and parent entities.

Britt Worldwide India Private Limited and Network Twenty One Private Limited also played a major role in promoting Amway's pyramid scheme by conducting seminars for joining members under the guise of selling goods by enrollment of members in the chain system. The promoters are conducting mega conventions and flaunting their lavish lifestyle and using social media to lure gullible investors.

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