The Enforcement Directorate (ED) made public on Monday its filing of a chargesheet against health and beauty giant Amway India Enterprise Pvt. Ltd (Amway) concerning an ongoing money laundering investigation. Allegations suggest that the company has amassed proceeds of crime amounting to Rs 4,050.21 crore.
This chargesheet, filed under the Prevention of Money Laundering Act (PMLA), 2002, was presented in a Special Court (PMLA) in Hyderabad, and the court officially acknowledged it on Monday.
The ED's investigation was instigated by multiple FIRs registered by Telangana Police under various sections of the IPC against Amway and its directors.
The FIRs from Telangana Police assert that Amway engaged in an unlawful 'money circulation scheme' disguised as the sale of goods. This alleged scheme involved deceiving the public by promising excessively high commissions or incentives via straightforward enrollment of new members. The promise held that these commissions or incentives would endure indefinitely.
The ED's inquiry divulged Amway's purported operation of a "Pyramid scheme" masked as direct selling. Instead of directly vending goods to end consumers, Amway reportedly initiated a multi-level marketing scheme involving numerous intermediaries under the guise of distributors. The focus allegedly shifted from product sales to member recruitment. The system seemed to reward those who recruited new members, thereby forming a structure where higher-ups received more commissions and lavish incentives, according to the ED's statement.
The ED alleges that Amway, through these schemes, accumulated substantial funds from subscribers by engaging in a multi-level marketing and money circulation scheme, resulting in proceeds of crime totaling Rs 4,050.21 crore, supposedly generated by cheating.
The investigation further uncovered that more than Rs 2,859 crore collected from members had been diverted and channeled into overseas investors' bank accounts, purportedly under the headings of dividends, royalties, and other expenses. As part of the probe, movable and immovable properties valued at Rs. 757.77 crore have been attached by the ED in this case.
Conversely, an Amway India Spokesperson responded, stating that the chargesheet pertains to an investigation dating back to 2011. They emphasized the company's continuous cooperation with authorities, providing requested information. Amway affirmed its commitment to compliance with legal and regulatory frameworks throughout its 25-year presence in India.
Expressing confidence in India's legal system, the spokesperson reiterated the company's intent to defend itself vigorously. They underscored Amway's legacy in India and its dedication to assisting employees and distributors in improving lives while navigating this legal process.
(With Agency Inputs)