|Enforcement Directorate (ED) and its Major Functions (jagranjosh.com)|
Last month, Indian financial regulators, in the form of the 'Enforcement Directorate (ED),' annonced that they had seized assets totalling around $190 millions from 'Amway India Enterprises Ltd.' The company, and others operating in conjuction with it, stand accused of being the front for a vast pyramid fraud and money laundering scam totalling around $7 billions. The ED issued this brief analysis:
“It is observed that the prices of most of the products offered by the company ('Amway') are exorbitant as compared to the alternative popular products of reputed manufacturers available on the open market. Without knowing the real facts, the common gullible public is induced to become members of the company ('Amway') and purchase products at exorbitant prices. In the process, they lose their hard-earned money...”
Thus, judging by their choice of words, one assumes that these India regulators have been doing their homework and studying how the 'Amway/MLM' racket got into India in the first place.
In June 1994, representatives of the US-based ‘Amway’ bosses approached the Indian Ministry of Commerce and Industry (Dept. of Industrial Development) bearing gifts.
By steadfastly pretending affinity with officials (who, naturally, wanted to believe that all external investment creates employment), the ‘Amway’ bosses initially sought an agreement (renewable biannually) which simply paved the way for the creation a privately-controlled, unlimited-liability, commercial company, ‘Amway India Enterprises.’ As a subsidiary (entirely owned by its American parent company), the representatives of the ‘Amway’ racketeers meekly accepted that ‘Amway India Enterprises’ would be forbidden to manufacture or import. The proposed company would be permitted only to use its so-called ‘Multi-Level Marketing Business Model’ to sell products sourced from local, independent, Indian manufacturers.
Furthermore, ‘Amway India Enterprises’ was obliged to file a separate agreement with the Reserve Bank of India, allowing the proposed subsidiary to transfer capital to, and from, its parent and, thus, act as a de facto, foreign exchange dealer.
Consequently, without any informed scrutiny, officials at the Indian Ministry of Industry, Secretariat for Industrial Approval (Foreign Collaborations II Section) rubber-stamped the application for the proposed 'Amway' company (within less than two months) on August 26th 1994.Twelve months later, 'Amway India Enterprises' was legally-registered after final approval by the Indian 'Foreign Investment Promotion Board.'
In this way, America’s contemporary version of the Trojan Horse was dragged unnoticed into India with the assistance of the country’s own naïve regulators. However, it lay dormant until May 5th 1998 when a network of regional offices began to be established.
Six years later, the destructive contents finally began to spill out. On August 8th 2004, the (apparently safe) original (biannual) agreement was mysteriously altered (at the request of the corporate officers of ‘Amway India Enterprises’) allowing the unregulated manufacture, and/or importation, of ‘Amway’s’ own range of effectively-unsaleable household, beauty and health products.
At no stage did Indian officials bother to apply common-sense and ask how the so-called ‘MLM Business Opportunity’ could possibly be economically-viable, and lawful, when ‘Amway’ products were now, self-evidently, several times the price of equivalent (and often superior) merchandise widely-available in traditional Indian retail outlets? Yet, implicit to the modified agreement was the understanding that ‘Amway India Enterprises’ would respect Indian law and recruit non-salaried agents who could earn commission payments from retailing products to the public. In plain language, Indian officials were deceived by the de facto agents of US-based 'MLM' racketeers.That said, it is not known what other inducements (if any) these conveniently-blind civil servants received.
The guts of above information comes from a landmark judgement given as long ago as July 19th 2007 against ‘Amway India Enterprises’ by Chief Justice G.S. Singhvi, and Justice C.V. Nagarjuna Reddy, of the High Court of Judicature, Andhra Pradesh, Hyderabad.
In 2006, the Criminal Investigations Dept. of the Hyderabad police raided, and sealed, the local offices of ‘Amway India Enterprises’ arresting various employees, following a particularly detailed complaint filed by A.V.S. Satyanarayana under the ‘Prize Chits and Money Circulation (banning) Act, 1978.’ This courageous individual confessed that he had been deceived into wasting a significant amount of time and money after having being subjected to overwhelming psychological pressure to join ‘Amway’ by two dominant men in his own social circle. Within three days of the registration of this complaint, aggressive lawyers acting for ‘Amway India Enterprises’ issued two writs against the Hyderabad CID. Typically, ‘Amway’ posed as the innocent victim under attack. Ignoring all quantifiable evidence to the contrary, the lawyers steadfastly pretended that their employer’s ‘MLM Business Opportunity’ was entirely legal and that ‘Amway India Enterprises’ was acting with the full-approval of the Indian government. Therefore, the Andhra Pradesh police had neither reason nor authority to launch such a heavy-handed investigation, and, thus, damage, a legitimate business. At the same time, both the lawyers and corporate officers of ‘Amway India Enterprises’ tried to convince the world that Satyanarayana was a pathetic liar who had filed a malicious complaint as the result of a marital/financial dispute which had, itself, resulted in his pursuing a vendetta against members of his family who were ‘Amway Distributors.’
Ironically, it was ‘Amway India Enterprise’s’ own malicious writs which brought the company under the rigorous scrutiny of the Andhra Pradesh High Court. Simply by applying common-sense, Chief Justice Singhvi and Justice Reddy were immediately able to see that the ‘Amway MLM’ fairy story is far too good to be true. Then, by ignoring the scripted-lies of ‘Amway’s’ attorneys, and by concentrating on the compelling testimony of the victim (backed up by documentary evidence), they deduced that the so-called ‘MLM Income Opportunity’ is in breach of Indian legislation. Despite the mystifying, linguistic and mathematical complexity of ‘Amway’s’ corporate camouflage, de facto agents of the company actually propagate the self-gratifying delusion that limitless prosperity can eventually be obtained without any further effort simply by regularly purchasing products and recruiting others to do the same, etc., ad infinitum. As a consequence, the two writs were dismissed, and the High Court of Andhra Pradesh ordered that the Hyderabad Criminal Investigation Dept. should be allowed to continue to follow whatever procedures are permitted by law to hold the corporate officers of ‘Amway India Enterprises’ to account.
Until this recent announcement by the Enforcement Directorate, and despite the boss of 'Amway India Enterprises,' and two other corporate officers, being arrested for, and charged with, fraud in the Indian State of Kerala in 2013, the pernicious 'MLM Income Opportunity' fairy story has continued to infect India, whilst India legislators have continued to be approached by the representatives of US-based 'MLM' racketeers who, obviously, have not wished to have their real activities rigorously investigated by independent Indian law enforcement agents.
David Brear (copyright 2022)