Kurnool/New Delhi : A district court in Andhra Pradesh sent Amway India MD and CEO William S Pinckney to 14-day judicial custody after he was arrested in connection with a criminal case registered against the direct-selling company.

While Amway India termed Pinckney’s arrest — the second in a year — an “unwarranted act”, an association of direct sellers said it sent out wrong signals to global investors on the day the Narendra Modi government took charge at the Centre.

Kurnool Superintendent of Police Raghurami Reddy said Pinckney was arrested in Gurgaon on Monday and brought to Kurnool in Andhra Pradesh on a warrant, in response to a complaint alleging financial irregularities by the company.

“The CEO has been booked under the Prize Chits and Money Circulation Schemes (Banning) Act (PCMCS) besides charges of cheating as well as extortion under relevant sections of the Indian Penal Code (IPC),” Reddy said. Pinckney was produced in a court in Dhone, which remanded him to judicial custody until June 7.

After the court rejected a bail petition, Pinckney was shifted to a prison in Kadapa district. The Kurnool police has also filed a petition seeking his custody for 10 days. Amway India called the charges against its managing director and CEO “frivolous” and said it gave “a misleading impression” about the company’s business. “We are aggrieved and shocked at the sudden and unwarranted act of detention of our official,” Amway India said in a statement. The case under which action was taken was filed in December, but the company had no prior information, it said.

Condemning the arrest, industry chamber Ficci said the “uncalled” for action may hit Indo-US business ties, while re-emphasising the need for a clear and independent regulatory framework for the direct selling industry in India.

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