Kozhikode, May 31 () : Amway CEO arrest will be probed. Kerala home minister has asked South zone ADGP to conduct a probe into the the arrest of William S Pinckey network marketing firm Amway’s Indian Chairman and CEO.
Union Minister for Corporate affairs Sachin Pilot too had voiced his displeasure over the arrest of CEO who is a national of United States. Amway officials’ contention is that William had been co-operating with investigation and an arrest was not needed.
Sachin said that there was no clarity on Ponzi scheme and of those running business within the law. His ministry was soon going to bring definition of such a scheme. Facing cases of fraud in Wyanad, a hilly region in Kerala, William along with top three executives arrived for giving evidence. At this juncture,Wayanad Crime branch (Economic offences) arrested them and put them in jail. A local court the next day let them off on conditional bail. The complaints were filed in 2011 and since then investigations were going on.
The complaint was that the distributors were forced into buying cosmetic and protein products which did not sell and they faced losses. The benefits never came to them.
Police claim that a G&H lotion 250 and G&H body shampoo which costs Rs 51 is sold by Amway distributors known as business owners for Rs 395. The economic offences wing seized 119 products with price list from Kochi.
Priced ten times more, 49% of the money got is given to business owners. Kerala’s KLF Nirmal coconut oil produced in a Tier 3 city Iranjalakuda is among the products sold by Amway along with Sarvotham Care and Naiza Laboratories in Himachal Pradesh, Soft Gel Health Care, Chennai, Aura Personal Products, Utharanchal, Aero Pharma, Mumbai, Fiabila Limited, Raigarh, Avalon Cosmetics, Mumbai.
Amway buys products from Indian companies and sells them at six to ten-fold prices,said Dy SP Sadanandan, who has done extensive research into Amway operations in the country. He has busted a money chain operation called Tycoon. Police term that the scheme that anyone can sponsor unlimited number of sponsors and the commission pattern makes it a non feasible one. Police termed Amway among multi level marketing chain as most dangerous.
Prospectus with details of success stories of Amway business owners who turned into millionaires and staying in villas etc were circulated to rope in new customers.