Amway India chairman, 2 directors held for cheating

Police today arrested direct marketing firm Amway's India chairman and CEO William S Pinckney and two of the company's directors, Sanjay Malhotra and Anshu Budhraja, on charges of cheating consumers and financial irregularities.

The crime branch of the Kerala police made the arrests on a complaint filed by a woman who claimed to have lost heavily through the marketing chain as also three other cases registered against the company in Wayanad district last year. Pinckni is a US citizen.

The police had registered three complaints against Pinckney - two in Wynad district and one in Kozhikode. Police sources said that Pinckney and others would be taken to Wynad for detailed interrogation and would be produced before the magistrate there.

Police had questioned the trio earlier this month and had asked them to report again for further questioning. They were arrested when they arrived at the police station.

Police had registered a number of cases against the company for cheating consumers by giving inferior goods at very high prices and money laundering.

The police had also earlier arrested Kerala chief of the company, Rajkumar on charges of violation of Prize Chits and Money Circulation Schemes (Banning) Act.

The Kerala police has got a number of complaints against Amway and other network marketing companies across the state over cheating consumers of hundreds of crores of rupees.

Most of the network marketing companies had been functioning illegally and their main modus operandi was money chain and direct selling business.

Amway India Enterprises Private Limited has reported a turnover of Rs2,288 crore for the fiscal year 2012-13 and registered over 7 per cent growth during the year.

The company, in the evening, sent out a press release saying, "Amway India Enterprises has been providing consistent support and cooperating with the investigations of the Kerala Police CB CID further to the FIR filed by Ms Vishalakshi in 2012."

''Mr William S Pinckney, MD and CEO of Amway India and two directors, Mr Anshu Budhraja and Mr Sanjay Malhotra - who had on 3rd May 2013, been granted anticipatory bail by the Kerala High Court over a case filed at Kozhikode in 2012 - have been taken into custody by the Wayanad police, Kerala for another case filed in 2011,'' Amway said in its statement.
 
Amway said it has submitted all information and documents that have been requested for the police officials.
 
Amway said the cases had been filed under the Prize Chits and Money Circulation Schemes (Banning) Act 1978, which is currently being amended at the centre under pressure from the Indian Direct Selling Association (IDSA), of which Amway is a member.

Last year, the crime branch (economic offences) wing had conducted searches at Amway offices at Thrissur, Kozhikode and Kannur, as part of its crackdown on money chain activities. Their godowns at these centres were closed and goods produced were also seized.

But Pinckney had got anticipatory bail in the case. Last year police had conducted raids in the offices of Amway at Kannur, Kozhikode, Thrissur and Kochi and seized products worth Rs2.5 crore.