Amway India chief likely to appear before ED tomorrow

HYDERABAD: Amway India chairman and managing director William Scott Pinckney would appear before Enforcement Directorate (ED) authorities in Hyderabad on May 31 to answer alleged violations of the Foreign Exchange Management Act (FEMA) by his company.
Though the Amway India chief had appeared before the ED authorities in Hyderabad a few months ago, as they were not satisfied with his replies, he was summoned again.Though Pinckney along with two other Amway directors was arrested in Kerala on Monday, he was later released on bail and the ED expects him to appear before them next Friday.
The Kerala police had arrested Pinckney on charges of cheating and violation of the Prize Chits and Money Circulation Schemes (Banning) Act 1978. The AP high court had earlier held as illegal the multi-level marketing methods (MLM) of Amway. The Reserve Bank of India (RBI) too issued guidelines which clearly put the activities of Amway under the purview of banned activities like lottery and gambling. Foreign Exchange Management (Current Account) Rules 2000 issued by the RBI brings multi-level marketing techniques and methods under the schedule of banned activities. Amway India has been accused of repatriating crores of rupees from India to the US, where its headquarters is located. Rules do not permit such repatriations particularly in respect of monies that were made out of gambling and lotteries.
In his first deposition before the ED earlier, Pinckney told them that Amway had obtained the necessary approvals from the Foreign Investment Promotion Board (FIPB) before setting foot in India in 1999. But, later several courts in India including the Supreme Court had held that the kind of activities being promoted by Amway and other multi-level marketing firms were nothing but gambling and hence, cannot be permitted.
In fact, RBI came out more clearly in this regard wherein it said that multi-level marketing is akin to lottery and gambling. Earnings from such activities made here by foreign firms should not be repatriated to foreign shores. But Amway has been doing this for one-and-a-half decades and it has already sent out several hundred crores of rupees to the US, official records say.