Thiruvananthapuram : The Kerala government on Friday ordered an inquiry into the police action against Amway India Enterprises (AIE) Chairman William S Pinckney and two company directors in connection with the fraud cases registered against the direct marketing company.
State Home Minister Thiruvanchoor Radhakrishnan directed North Zone Additional Director General of Police (ADGPA) Shankar Reddy to probe the circumstances that led to the arrest of the three key officials Pinckney, Sanjay Malhotra and Anshu Budhraja by the Crime Branch.
The order for inquiry followed widespread criticism from various quarters about the need for arresting top officials in cases that involved only a small sum and the manner in which the arrests were made.
Union Corporate Affairs Minister Sachin Pilot had on Thursday termed the arrest unwarranted and argued that such incidents would ‘adversely affect the country’s prospects as an investment destination’.
He said the arrest may have been due to ambiguities in the rules governing direct selling and added that the federal government would remove them as “early as possible”.
Crime Branch officials investigating the complaints filed against Amway said its commission distribution system among agents is a disguised money-circulation scheme that has been declared illegal.
Meanwhile, the representative body of direct selling companies, including Amway, Oriflame and Tupperware sought a separate regulatory framework for the sector in order to demarcate it from fraudulent pyramid and ponzi schemes in the wake of arrest of Amway India top officials.
Indian direct Selling Association (IDSA) Chairman Amarnath Sengupta told PTI, “we want definitional clarity and operational framework under which the direct selling industry can operate. Prize Chits and Money Circulation Scheme (Banning) Act (PCMC) of 1978 is inapplicable for direct selling industry and we want a clear exclusion from it.”