Amway India CEO William Scott Pinckney was recently arrested in Kerala on charges of financial irregularities. Police from Meppadi station took Pinckney into custody, along with Amway India Directors Sanjay Malhotra and Anshu Budhraja. The arrests follow an investigation into a First Information Report (FIR) filed in 2011.
The trio faced formal charges under India's Prize Chits and Money Circulation Act of 1972. An official from Kerala's Economic Affairs Wing (EOW), part of the arrest operation, stated the company lured people with "easy money" and encouraged new members to recruit more, which led to illegal money circulation. The EOW had received multiple complaints against Amway.
Several other FIRs have since been registered. One such complaint came last year from a distributor named Vishalakshi. Assistant Sub-Inspector of Police N K Jaganivasan told the Mirror that Vishalakshi alleged she was forced to purchase Amway products worth Rs 1 lakh. She also claimed to have invested Rs 1 lakh in Am-Sure, Amway's insurance arm, losing the money. The crime branch took over her case.
Pinckney, Malhotra, and Budhraja initially appeared before police with anticipatory bail from the Kerala High Court and were released. However, Waynad police then arrested them again in connection with four additional, similar complaints. Police investigating Vishalakshi's 2012 FIR found that goods were sold at significantly inflated prices. One product, valued at Rs37, retailed for Rs395 to consumers.
These four complaints, combined with Vishalakshi's, bring the total known FIRs against Amway to five. The EOW also conducted raids last year at Amway's godowns in Kozhikode, Thrissur, and Kannur, seizing goods valued at Rs2.14 crore.
Amway issued a statement shortly after Pinckney's arrest. A company spokesperson said Wayanad police in Kerala took the three into custody for "another case filed in 2011." The spokesperson clarified that police did not issue summons or seek information from the company or its officials regarding that specific 2011 case. Amway management asserted it would have cooperated, as it consistently acts as a law-abiding corporate citizen.
As the largest operating multi-level marketing (MLM) company in India, Amway India has pushed for clear guidelines for legitimate MLM companies through its involvement in the Direct Selling Association. Currently, no official framework exists for MLM companies to follow or reference in their operations.