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Rs 757 crore worth assets of Amway attached as ED alleges company running a pyramid fraud

Rs 757 crore worth assets of Amway attached as ED alleges company running a pyramid fraud.

Assets worth over Rs 757 crore belonging to direct-selling consumer goods company Amway India have been attached as the company has been “running a pyramid fraud in the guise of a direct selling multi-level marketing network," the Enforcement Directorate said in a statement issued on Monday.

Out of the total Rs 757.77 crore of assets attached under the Prevention of Money Laundering Act (PMLA), immovable and movable properties are worth Rs 411.83 crore while the rest are bank balances of Rs 345.94 crore kept in 36 accounts belonging to Amway, the ED statement explained.

The provisionally attached properties of Amway India Enterprises Pvt Ltd. include land and factory building at Dindigul district in Tamil Nadu, plant and machinery, vehicles, bank accounts and fixed deposits, it said in a statement.

“The entire focus of the company is about propagating how people can become rich by becoming members of the Amway scheme,” the ED statement alleged.

The ED investigation states that Amway brought Rs 21.39 crore as share capital in India in 1996-97 and till 2020-21 while the company has remitted a whopping Rs 2,859.10 crore in the name of dividend, royalty and other payments to their investors and parent entities.

ED claimed that Amway collected Rs 27,562 crore through its business operations from 2002-03 to 2021-22 out of which the company has paid a commission of Rs 7,588 crore to its distributors and members in India and in the USA.

Attaching a property means it cannot be transferred, converted or moved.

Amway India is yet to respond to the charges.

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".

"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 the hike of prices of the products," the statement added.