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HindustanTimes Sat,26 Jul 2014

Amway India CEO, 2 more held for money-laundering

HT Correspondent , Hindustan Times  Thiruvananthapuram, May 27, 2013
First Published: 19:19 IST(27/5/2013) | Last Updated: 09:04 IST(28/5/2013)

The Kerala police on Monday arrested Amway India managing director and CEO William S Pinckney, a US national, and two directors of the multilevel direct selling giant for alleged money laundering and breach of trust.

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The three top officials of the fast-moving consumer goods company were arrested from Kozhikode in north Kerala after their appearance before a court. The police arrested them in connection with three different cases filed in neighbouring Wayanad district.
 
"The chief executive officer and two other officials, Anshu Budhraja and Sanjay Malhotra, were arrested by the Wayanad police on charges of money-chain activity and laundering. They were taken to Wayanad and will be produced in court on Tuesday," said CA Walson, superintendent of police of the state economic offences wing.
 
On May 3, the three officials had secured anticipatory bail from Kerala high court in a case filed by a housewife in Kozhikode district.
 
Following the arrest, Amway India said the police action was in connection for another case filed in 2011. http://www.hindustantimes.com/Images/Popup/2013/5/28_05_pg1b.jpg

"We would like to clarify that with respect to the 2011 case, the company or its officials were not issued any summons to join the investigation nor was any information sought by the police," the company said in a statement.

Amway India's statement after arrest of CEO, two directors

"The company management would have cooperated with respect to the 2011 matter as well, as we always have as a law abiding corporate citizen."
 
The company added, "The cases had been filed under the Prize Chits and Money Circulation Schemes (Banning) Act 1978 — the Act which currently is under amendment at the Centre... Amway would like to state that it has great confidence in the judicial processes and legal system, and hopes to secure a favourable outcome soon."
 
Amway India Enterprises Pvt Ltd, which reported a turnover of Rs. 2,288 crore for the 2012-13 fiscal, has been facing allegations of irregularities in Kerala.
 
Last year, the police had raided Amway offices across the state after complaints surfaced that the firm was taking huge sums in advance from customers and representatives. The company’s state manager Rajkumar was arrested.
 
Subsequently, the company claimed in a big campaign it was doing legal business within guidelines approved by the state government in 2011 for direct selling companies.
 
Investigators, however, found the company was making it mandatory for distributors to purchase products at high prices and this amounted to violation of guidelines.
 
The police are working on leads that lakhs of rupees collected this way have been invested in the insurance business.
 
Amway is a multibillion-dollar international business operating in more than 80 countries.


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