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SJM Hails ED’s Action Against Amway India

Swadeshi Jagran Manch (SJM) has welcomed the Enforcement Directorate’s (ED) action against Amway India Enterprises Private Limited, a company accused of running a multi-level marketing scam, and has demanded a probe by the central investigative agencies against all such institutions or companies which are working to “rob innocent people” by luring them with more income.

The forum has also demanded strict action against the culprits of such cases.

While welcoming ED’s action against Amway for “running a pyramid fraud schemes under the guise of Direct Selling Multi-Level Marketing Network”,  SJM,  issued a statement saying that there is a need to create a regulatory framework for such Multi-level marketing (MLM) companies to strongly prevent fraudulent practices.

SJM claimed that there are several more MLM companies which have been selling their products at exorbitant prices by “looting innocent citizens” and by “luring them to earn handsome incomes” in India. “When those in the net of these companies start luring their friends and acquaintances, the chain starts,” SJM  added.

SJM, in the statement, cited a report published by the Federal Trade Commission that studied the business models of 350 MLM companies, saying that 99 per cent of people involved in MLM businesses lose money.

“The business model may be there, but for the gullible, it is causing a definite loss rather than an income opportunity,” the statement read. 

On April 18, the ED attached assets worth Rs 757.77 crore belonging to Amway. 

The attached properties include land and factory building of Amway at Dindigul district in Tamil Nadu, Plant and Machineries, vehicles, bank accounts, and fixed deposits, said the agency, in a statement.

The attached properties include Rs 411.83 crore immovable assets and bank balances of Rs 345.94 crore from 36 different accounts belonging to Amway.

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.

“It is 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,” said the ED.

The federal agency accused that 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 to the hike of prices of the products,” said the ED.

It is observed that the company has collected an amount of Rs 27,562 crore from its business operations from 2002-03 to 2021-22. Out of this, the company has paid a commission of Rs 7588 Crore to its distributors and members in India and in the USA during Financial Year 2002-2003 to 2020-21.

“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,” said the ED.

Amway has brought Rs 21.39 crores as share capital in India in 1996-97 till Financial Year 2020-21, said the ED, it added, “the company has remitted the huge amount of Rs 2,859.10 crore in the name of dividend, royalty and other payments to their investors and parent entities”.

Britt Worldwide India Private Limited and Network Twenty One Private Limited also played a major role in promoting the pyramid scheme of Amway by conducting seminars for joining members under the guise of sale of goods by the enrolment of members in the chain system, said the Central agency.”

The promoters are conducting mega conventions and flaunted their lavish lifestyle and used social media to lure gullible investors,” the ED added. 


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