Amway India Chairman and Chief Executive William S Pinckney has been arrested by Andhra Pradesh Police in connection with a criminal case registered against the direct-selling company.
He was on Tuesday produced before a Kurnool district court which sent him in 14-day judicial custody.
Kurnool Superintendent of Police Raghurami Reddy said that Pinckney was arrested in Gurgaon yesterday and was brought to Kurnool on a warrant. The action against him was taken on the basis of a complaint filed here alleging financial irregularities in Amway’s operations.
“The CEO has been booked under the Prize Chits and Money Circulation Schemes (Banning) Act, besides charges of cheating as well as extortion under relevant sections of the Indian Penal Code (IPC),” Reddy said.
The company termed the allegations against the CEO as “frivolous” and said his arrest was “unwarranted”.
This is the second time that the Amway India CEO has been taken into custody. Kerala police had arrested Pinckney as well as two Amway directors last year for alleged financial irregularities.
A bail petition was moved in the court, which was rejected and the case has been posted for arguments on Wednesday.
Reacting to the development, Amway, in a statement, said that it was “aggrieved and shocked”, since the arrest was “unwarranted” and the case in which action has been taken was filed in December 2013.
“The company had no prior information on the same. Allegations mentioned in the FIR are frivolous and give a misleading impression about our business,” the statement said.
Amway claimed that as “a law abiding” corporate, it has always cooperated in such investigations, and has responded to the queries and documentation. So far, Amway has furnished all information and documents sought by the police officials, the company further said.
Indian Direct Selling Association (IDSA), in a statement, condemned the arrest of Amway CEO and said: “This incident highlights the urgent need for the Government of India to amend the Prize Chits and Money Circulation Schemes (Banning) Act 1978 (PCMCS). Unless amended, the Act will be unable to distinguish genuine direct selling companies from pyramid schemes and regular consumer complaints will continue to attract provisions of the PCMCS Act.”