India Police continue harassment of Amway India

In news out today, Amway India CEO William Pinckney and two company directors, Sanjay Malhotra and Anshu Budhraj, have been arrested, charged, and remanded in custody for 14 days. This continues a pattern of what can only be called police harassment in the Indian states of Kerala and Andhra Pradesh. Details have been hard to come by, but the charges apparently result from 4 complaints lodged against Amway in the Wayanad district of Kerala. Amway had reportedly been aware of, and co-operating with police regarding one charge, but the arrest resulted from three other complaints. According to the Times of India, the known charge was from a 2011 complaint and –

Vishalakshi alleged that Amway agents collected Rs.3.5 lakh from her for products sold by the companies and asked her to add more members to the chain. As she could not add more members, she sought a refund but the agents refused

3.5 lakh rupees is over US$6500!!! I’ve been unable to discover when this offence was alleged to have occurred, but clearly this is pretty bizarre, and if true it’s clear some Amway business owners (including, I would suggest, this woman!) have seriously abused the Amway business model.

Amway was apparently dealing with this issue and had already received “anticipatory bail” for the executives. The current arrests are apparently related to new complaints. And that’s where it get’s really bizarre –

The three complainants — Jafar, T Ashraf and P Hareendran — had alleged that in 2002 Amway India attempted to collect money from them with the intention to deceive them by involving them in a money-chain scheme.

This “offence” allegedly occurred more than a decade ago (!!!) and indicates that someone merely “tried” to collect money and deceive them. Yes, that’s right – three company executives of a multi-billion dollar multi-national award winning company have been arrested and thrown in jail because three people claim that, more than a decade ago, someone tried to recruit them in to Amway, and they believe Amway is illegal and in violation of the Prize Chits and Money Circulation Scheme.

Sorry, India, but this is shameful.

Indian contacts have suggested to me that the problem may be that Amway India is not corrupt and refuses to pay the bribes that local officials typically demand. Corruption is, unfortunately, rife in India, with most Indians reporting they have had to pay bribes to officials (including police) in order to get normal tasks completed.

Amway India IBOs should keep the story of Amway Korea in mind. In 1993, David Ussery, general manager of Amway Korea, was arrested, interrogated, and then held in jail for a week, with various allegations made against Amway. Eventually the charges were dismissed, and today, Korea is Amway’s third biggest market. In 2011 the Korean Government named Amway one of the 30 most successful foreign companies in the country.

update: sources tell me the Amway executives have been granted bail

22 thoughts on “India Police continue harassment of Amway India”

  1. At the outset, I feel shame on our dirty politicians, local mafias and other local leader are misguiding those people who are indulging wrong things and the above political parties, police departments are taking advantages so that they will get some handsome money from Amway India Enterprises. I don’t what a kind of people are and what benefits are getting while doing this hooliganism.

    Dear ABOs, let’s unite and stand against those dirty people and corruptionists.

  2. This is the most dumbest corporate move by Amway India to send it’s MD for question answer session to a remote place in Kerala. Anybody from Legal Department could have done this.

    This is not a new market. Its 15year old and Amway has put in lot of efforts in creating a brand image in this market. This incident has made a slight dent in the brand image of Amway in India and it may take a year or two to make up for this loss

  3. Several years ago, an IBO (who was from India and still has family there, but now lives in the United States) who was three in depth from me, along with her sponsor and a qualified Emerald in our LOS, decided to build a group in India. They went over quite a few times and never really got much of anything going. After reading several articles here, and a couple other places, I’m kind of glad they didn’t.

    1. A platinum I knew from Oz (he was actually Swedish) went over to India with a whole bunch of Indians in his team when the market opened. The Indians all gave up and went back to Australia. He stayed and now he’s Diamond. He’s kind of glad he did 🙂

  4. I’ve been dealing with Indian people in traditional business both here and over there….trust me…they have no concept of business ethics. This is most likely a shakedown attempt by corrupt local police and/or politicians.

  5. Hi there first of all 3.5 lakh rupees is roughly $6300 US !!!
    Back in 2002 you can add about 25 percent to that amount today.
    We all know this is a bogus charge against Bill Pinckney, first of all
    I have a large Amway business in North America and India and I am very upset at Amway and
    whoever gave the advice(I’m assuming Amway Legal Dept. they need to be fired ASAP!)
    To send their company MD of a 2500 crore company to a backwards place in South India absolutely the
    dumbest move anyone could of made.Everyone in India from heads of large MNC’s to the average person knows you do not show up at all police station to answer questions unless you are in control of the situation and we all know what that means on the Indian subcontinent. As soon as Bill showed up they knew they could extract a bribe from him and of course Amway wasn’t going to do that so they trumped up some bs charge and arrested him and 2 of his senior directors, this could of been handled by sending the area manager and somebody from legal to the police station to discuss whatever they wanted to discuss but no lets send the MD and 2 of the company directors, and in the process Amway India made front page news and breaking news on all the networks. What this did was undo all the positive work Amway has done on its image the last few years and hasput very one in a very embarrassing situation of why their company MD has been arrested, try building a business when the first thing people do is mention that your company MD has been arrested. The people in India are so mad that they would allow the MD go to the police station to answer some nonsense by doing this they have jeopardized a lot of people’s business, whoever gave this advice should be fired immediately.
    I spoke to a F.Emerald in my group who happens to be a successful traditional businessman he was visiting his native place and one of the servants came in and told him “Sir your company MD has been arrested” I mean that’s how bad it is!
    In India when you are dealing with the police you do not act in good faith no matter how honest you are ,the police will take advantage of your good faith,they will strip you apart and unless you bribe your way out its game over, this miscalculation by Amway will take a few years to sort out. Absolutely dumbest corporate move ever, I love this business and Bill Pinckney he is a great guy and done lots for Amway India but whoever gave him this advice should be fired immediately.
    I remember a few years ago there was a Amway Success seminar in a northern city, and Amway had all the necessary paperwork including the most important document from the authorities an NOC(No objection certificate) now it was also election time and the police convienitly cancelled the NOC, well the Amway executives were running around with the file in their hands in a panic saying you cannot cancel this function we have all the paperwork. Well it’s election time and that means its time to get paid, well I won’t mention the Leader’s name but they enjoy Founders Council trips,Madam told the executives that its election time and unless you give the authorities some incentive this function is cancelled and 10,000
    people are going to give me a beating. Well the Amway executives called head office in Delhi and you know what happens when you get a bunch of MBA’s together, we’ll nothing happens. I remember Madam grabbed the file and threw it on the ground saying forget this file your MBA’s are useless to me,she pulled in rupees the equivalent of a G note and off went the Amway executives to the police station to get the new NOC which they got in a matter of minutes. That’s the price of doing business in India, now do you invest a G note so 10,000 people who have traveled far and wide at their expense can watch a function and spare you from insult and agony,or do you play stupid! easy choice right!
    Welcome to India! Yes the rules are different !

    1. Thanks for the comment, and the correction, which I’ve fixed. Still a ridiculous amount of money. My experience with Amway legal is that they are very good at law and rules, but not very good at listening to the field and understanding the realities of the marketplace. They have, for example, threatened me with loss of my IBO’ship if I didn’t remove a pro-Amway article (not written by me) on Amway Wiki. Without wanting to toot my own horn, could you imagine the damage to Amways’ reputation if I turned this blog against them? Good grief. Heck, I get regular invites from other MLMs trying to recruit me. Just this week one offered to fly me the US for their major conference in an effort to convince me to join them.

      I suppose when you’ve spent 54 years outsourcing your marketing and public relations to the field, your internal knowledge and experience suffers. Amway need to learn how to treat their friends better. Now, that doesn’t necessarily mean stooping to bribes and corruption, but there are things you can do. I’m aware there’s been occasional programs of flying journalists to the US to see Amway’s facilities, and Candace Matthews has been engaging the media in a great way. That’s a great start, but in my opinion they also need to have field leaders actively engaging with the media and influencing the people and stories that go out there. It’s the ability of normal people to make good money that the public and media question, not the ability of Amway itself to make money.

      Anyway, that’s one little rant of mine. For all their flaws, Amway is still better than most of the other options out there!

      1. Don’t get me started! I am still trying to convince Amway Legal and Rules to let me publish a positive article about lines of sponsorship. It is suppose to replace the one they had removed. Bureaucrats!!! They seem to have no idea what an IBO is. Go figure!

        1. It is now time to get started. As a matter of principle and protest, as of today, July 1, 2013, I am officially not an IBO. (I chose not to renew.) What follows is my story concerning publishing an article about notable Amway IBO’s that included their “line of sponsorship” (LOS).

          Before I get started, let me just say that I believe there is much to be admired about the Amway founding families and the business plan they developed for us. What I don’t find admirable is Amway Corporation’s attempt to censor free speech. Specifically their Code of Conduct, Rule 6.1, concerning the publication of line of sponsorship information.

          Last year I was surfing the internet and came across “Amway Wiki”.I read the article David had posted at “Ja-Ri”. I rewrote it and he posted it. I continued to do research on the content. Last May, I sent it to Rich DeVos for editing. I had many questions about early Diamonds and felt he was the best person to answer them. He forwarded the Article to Amway Rules Administration. A young woman there informed me the article was in violation of Rule 4.27 concerning the publication of line of sponsorship information.

          I broke the article into two parts. One is now published as “An Amway History 1”. The other was drastically rewritten and re-submitted. I told them I intended to submit it to Amway Wiki to take the place of the Ja-Ri article. Once again, permission was denied. I commented that the rule was unclear why permission should be denied. They rewrote the rule as 6.1 but failed to inform me that they had done so. David said he was threatened with termination if he published my article. I don’t want that to happen. However, I don’t have much to lose by not renewing. I still support IBO’s.

          With some much appreciated help, I completed my research. All LOS have been correctly identified! The article was resubmitted. The bureaucrats at both Rules and Legal have praised it. However, Amway still will not give written permission to publish it.

          In April of this year the manager of Rules offered me a conference call with him, his supervisor, and a member of Legal. I wrote and asked if the call could be recorded. He did not and has not responded to me since then. Later, I received an unexpected phone call from a member of Legal who tried to explain that if I were allowed to publish my article that it would leave the door open to others asking for permission. Later in the conversation she told me that the only objection was to what appeared in the upper left corner of each profile: a series of numbers. Of course, this was off the record.

          To the best of my figuring, Amway’s bureaucrats will do anything to protect Amway’s reputation. They seem to have gotten it into their collective heads that because many Diamonds have left the business (for whatever reason) that any mention of Diamonds in connection to a “line of sponsorship” must be bad and must therefore be suppressed.

          May 28, I wrote Amway: ‘Regarding Rule 6.1.5: [my article] will not “cause significant and irreparable harm to Amway”. On the contrary, it applauds the achievements of some of Amway’s most outstanding IBO leaders and is intended to be an inspiration to all IBO’s and their prospects.’ Silence is the only answer given to these facts.

          The look my article takes at those I chose to honor is neither detailed nor intimate. (There is no mention of who all the IBO’s are in their personal organizations. Also, there is no personal contact information mentioned.)

          Rule 6.1.5 indicates Amway will sue anyone who violates Rule 6.1. Will they, really? Should I find out? What will suing over an “unauthorized”, positive article do to Amway’s reputation?

          Perhaps you, dear reader, should read Rule 6.1 for yourself. Then, If you feel it needs to be changed, you can email the IBOAI. (The Board meets the last full week of October.)

          Or, better yet, also write to:

          Alticor, Inc.
          Attn: Rich DeVos 34-2F
          7575 Fulton Street East
          Ada, MI 49355-0001

      2. please dont leave Amway doesnt matter what will happen. you are really a true fighter for Amway. all of the IBO in the world owe you a thanks 🙂

  6. Rich, Steve and Doug have to be sacred. If I were in their shoes, I would close the factory and the affiliate there. Some Indian people would lose their jobs, many third-party companies that sell their products via Amway India would lose part of their business and I would allow distributors to register in another country. I know this goes against the Amway philosophy, but I also think that in order to help people to help themselves, they first must be educated. When you offer the business to an analphabet, you will always get complaints like these. And, unfortunatelly, it seems to me that in India, there are many, many analphabets (sorry to all who are not).

    1. Amway’s never shut an affiliate. They’re not going to start now. This is only one part of India, other parts are fully supportive of direct selling.

      1. I have many years experience working in international envirnoments including india and korea mentioned above. Cant give any input into this particular incident except to say as a general rule if you want to play in some of these markets, better to play to local rules or the above kind of event might occur. Ethics are fine but not always rewarded.

      2. Agreed, that’s why I called them “sacred”. 😀
        Seems to me that India with all the rapes, corruption and ineffective and corrupted police is one big mess and their way to a civilized world will be very long.

    2. I am looking at what I wrote – if I closed an affiliate I wouldn’t be able to sell the products to distributors so there would be no business and it wouldn’t make sense for them to register in another country. 🙁

      However, the point, of course, remains: if India continues to treat foreign reputable companies like Amway this way, we all can predict what will happen and the Minister knows it too:
      “Such events (like Amway) might negatively affect the prospects of our country as an attractive investment destination,” he noted.

      Glad to read Sachin Pilot’s comments on this case. Hope India will soon remove the ambiguities in laws – it is in their best interest.

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