American Chamber of Commerce Concerned Over Amway India CEO’s Arrest

The American Chamber of Commerce in India (Amcham) has expressed concern over the arrest of Amway India chief executive William Pinckney.

"This unfortunate incident highlights the need for the government to amend the Prize Chits and Money Circulation Schemes (Banning) Act 1978 (PCMCS) and calls for a systematic solution to the direct selling industry's operational challenges in India," Amcham said in a statement.

Pinckney, who was initially arrested by Kerala Police in 2013 along with two directors of the company, was held again on May 27 by the Andhra Pradesh police in connection with a complaint, alleging unethical circulation of money, filed against the company under PCMCS.

He was arrested in Gurgaon and brought to Kurnool in Andhra Pradesh.

Amcham said Amway is a direct-selling, fast-moving consumer goods company that uses multilevel marketing to sell its products through independent distributors. "These distributors earn their income only from the sale of products or from the sale of products their groups make. No commissions are made for recruiting new distributors into the business. Hence, compensation under Amway’s sale and marketing plan is based solely on the sale of products," it said.

"The Act, in its present form, is unable to distinguish genuine direct-selling companies from pyramid or Ponzi schemes. Like other countries, India needs to amend this act and create a conducive legal environment for the Industry," said Amcham India executive director Ajay Singh.

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