After the arrest of Amway India Chairman William S Pinckney’s arrest, the Rs 6,385 crore direct selling industry in India wants clear guidelines governing its functioning.
The three Amway India employees, including two directors, were booked under the Prize Chits and Money Circulation Schemes (Banning) Act after some distributors filed a complaint against making allegations of fraud against them.
“There is great confusion in the minds of regulators and they are unable to understand the difference between multi-level marketing and pyramid or ponzy schemes,” Amarnath Sengupta, Chairman, Indian Direct Selling Association (IDSA) said.
Sengupta also said that the IDSA has held a meeting with Sachin Pilot, Minister of State of Corporate Affairs, to explain its situation and further talks are on with the ministry, which also understands the importance of the issue following the arrests. The direct selling industry is growing rapidly and is expected to cross the Rs 10,000-crore mark next year.
The incidence in Kerala has shaken up Amway India and various other stakeholders. At the very least this should have been a civil proceeding and not a criminal case,” he added.
The industry argued that the Prize Chits and Money Circulation Schemes (Banning) Act that has been used to govern the industry is not only outdated, but also does not really address the requirements of regulating this industry. It sought that the direct selling companies should be excluded from Prize Chits and Money Circulation Schemes (Banning) Act, 1978 (PCMCS) because no financial circulation is undertaken by direct selling companies.
“IDSA has been continuously advocating with the Government of India since last many years and we as an industry body association would want to emphasise on separate regulation that should govern this industry,” he said condemning the “unwarranted arrest” of Amway officials which, he said, will dampen the spirit and confidence level of 50 lakh distributors.