The Andhra Pradesh High Court did NOT determine Amway India was an illegal money circulation scheme

In news out of the state of Andhra Pradesh in India today, Amway India CEO William Pickney has been arrested and taken in to custody for the second time following what can only be called frivilous and false allegations against the company. I’ll post some more on this but first I want to address a lie falsehood that is continually spread about past legal proceedings against Amway India. This lie was repeated in numerous newspapers today, and has done in the past as well. Here’s one example from today, reportedly from an Andhra Pradesh Police statement –

a division bench of the High Court held that the scheme of Amway is illegal Money Circulation Scheme and falls within the “mischief of definition of Money Circulation Scheme.

A little history is necessary to understand the situation here.

In 2006 Andhra Pradesh state police (CID) shut down Amway in that state claiming it violated India’s Prize Chits and Money Circulation Schemes (banning) Act.

 

Amway petitioned the High Court and an injunction was issued against the CID, allowing Amway to reopen. Amway then went further and asked the High Court to dismiss the CID case completely. The High Court rejected that request, stating

if the allegations contained in the report of C.No.1474/C-27/CiD/2006 dated 24-9-2006 are taken on their face value they make out an offence punishable under the provisions of Sections 4, 5 and 6 of the Act.

The “allegations contained in the report” are the Andhra Pradesh Police’s claims about how Amway operates. The High Court simply said that if what the Police claim is true, then Amway is in violation of this act, so the case shouldn’t be dismissed and the allegations should be investigated. In August, 2007 the  Indian Supreme Court ordered the Police to complete their investigation within 6 months, so the case could proceed. After 7 years it still has not been completed.

Here are three key examples of some of these “allegations” –

“a person who joins as distributor is required to enroll six persons”

False. A person who joins Amway isn’t required to do anything.

“the money the person at the top of the group is supposed to get according to the scheme includes the money which the first member, pay either towards subscriptions (initial/renewal) or by selling products.”

False. Distributors don’t earn any income at all from subscriptions.

From renewal fees, Amway earns “easy/quick money sans any service to the distributors/ members.” 

False. Amway provides significant services to distributors in exchange for membership fees. Furthermore, the “easy/quick money” part of the law in question is regarding promoting you can earn it by joining Amway. Not that it’s quick and easy for Amway itself. (note: these fees have since been removed in Amway India anyway)

I completely agree with the Andhra Pradesh High Court! If the allegations are correct then Amway may be in violation of Prize Chits and Money Circulation Schemes (banning) Act, so a full court hearing is a perfectly reasonable thing to have to establish whether the allegations are true or not, and it would be unreasonable for the High Court to intervene and simply dismiss the case before it had even started.

Nearly 7 years later this case has still not proceeded, and the Andhra Pradesh Police are outright lying wrong about what the High Court said.

7 thoughts on “The Andhra Pradesh High Court did NOT determine Amway India was an illegal money circulation scheme”

    1. Amway India CEO Bill Pinckney is still being held without bail, which is a disgrace. An Amway delegation apparently met with the Police Inspector General this week to discuss the case, and VC Sajjanar, one of the anti-mlm zealots behind this and previous actions, was already there having “briefed” (read: biased) him. His buddies in Kerala are about to hope on the bandwagon again.

      It’s seriously bizarre how a handful of clueless people can have such influence.

  1. Its now an annual ritual to do this by some state or another …. it seems – we need a new law very urgently … as there are a huge number of Indians who are now into some kind of MLM deal.

  2. Pilot or Jaitley, doesn’t matter. The point is that the police got it all wrong. Somebody should remove the ambiguities from the India’s Prize Chits and Money Circulation Schemes (banning) Act 1978. They promised it years ago, the draft has been there for years and nobody cares. What a mess! All those problems just because some politicians are too lazy.

  3. Sachin Pilot is no more minister of corporate affairs. At present, I think this comes under Mr Arun Jaitley.

  4. Now that India demonstrated their willingness to “support” foreign companies and open their country to the investors, I am sure that millions of them are heading into India. After all who wouldn’t want to be arrested and bullied at least once in their lifetime…? And in India you will always have a second chance as a bonus! Congratulations!
    BTW: Looking forward to hear some news from Sachin Pilot again…

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