Amway arrest worries Pilot
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- Published 30.05.13
New Delhi, May 29 (PTI): Corporate affairs minister Sachin Pilot today said the Centre would remove as “early as possible” legal ambiguities that apparently blurred differences between fraud investment schemes and “reputed law-abiding” firms.
The comments come against the backdrop of arrests earlier this week of global direct selling firm Amway’s India chief William S. Pinckney and two directors in Kerala over allegations of fraud.
They have been booked under Prize Chits and Money Circulation Schemes (Banning) Act, whose provisions have been used to book perpetrators of Ponzi schemes like those of the collapsed Saradha Group in Bengal.
Kerala police contend that Amway’s commission distribution system among agents is a disguised money-circulation scheme. The firm has rejected the claim.
“We (the ministry) will work closely with other ministries and industries to remove the ambiguity in the law (related to tackling fraudulent schemes) as soon as possible,” Pilot said today.
He described the Amway arrests as a “disappointing eventuality”. Pinckney and the others have got bail.
“While steps should be taken to crack down on fraudulent companies running dubious investment schemes, companies that are reputed and abiding by the law must be delineated. Such events (like Amway) might negatively affect the prospects of our country as an attractive investment destination,” Pilot said.
The Centre is scanning Ponzi firms and fraud schemes in the wake of the Saradha fiasco. But Pilot sought to make a distinction. “While we take strong action against Ponzi schemes, we need to be careful not to create a vitiating atmosphere for reputed and law-abiding companies.”