Decoding Ponzi Traps - Greater Kashmir

Besides, under the rules, direct selling businesses and direct salespeople would be barred from advertising a pyramid scheme, enlisting anyone in such a system, or engaging in such a structure in any way under the guise of undertaking direct selling business.

Notably, the earlier law governing such activities, Prize Chit and Money Circulation (Banning) Act 1978 (PCMCA), was considered weak and toothless to book the culprits.

It's here the enforcement directorate (ED) picked the operations of Amway in line with pyramid or MLM pattern by describing the whole thrust of the company around promoting how members may get wealthy by being members. The agency added: "The emphasis is not on the products. This MLM Pyramid fraud is disguised as a direct selling firm by using commodities."

It's worth mentioning that Amway entered India in 1996-97 with a share capital of just Rs21.39 crore. So far, as per the reports, it has remitted Rs2,859.10 crore as dividend, royalty and other payments to its investors and its parent entities.

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