June 14, 2024

The Scoop India

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How Amway India earned 27 thousand crores by fraud ?

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BY-Rajeev Choudhary

You must have met friends or relatives near you or any uncle or aunt of the locality sometimes at a wedding or festival. Those who must have shown this dream that by joining such a company, make some members behind you. By which you can become rich in a few days or months. Then he gives the example that he has heard the name of Vinod and tells that he used to sell Chole Kulche earlier, but today see, he does not keep his feet below Mercedes. Hey Rajesh has heard that he used to drive a rickshaw in Indore, today he goes to Dubai for shopping and Thailand for massage.

Having heard such examples, now the company that sells such dreams, Amway, has been accused of cheating billions of rupees. Taking strict action against the multi-level marketing company Amway, the Enforcement Directorate i.e. ED has attached its assets worth about seven and a half hundred crores.

Years ago, there were some people in the kingdom of kings who used to earn their livelihood by bluffing people without working hard, then people used to call them thugs. But now the business of thugs is called business and thugs are also called businessmen.

image google

It was the year 1959 in America, J von Andel and Richard DeVos together established a company in Michigan, USA. Named Amway. But even after working hard in America for many years, the company could not take any big profit.

After 45 years it was the 90s. Films like Jeet, Hum Aapke Hai Koun, Dulhe Raja and Kuch Kuch Hota Hai were rocking India. Then the people of M Way Company thought, why not move to India. In those days Fair and Lovely was making fair in India for weeks. If the toothpaste of one toothpaste company had salt in it, then the toothpaste of another would have a whole kitchen including salt cumin. Lemon in the dish soap and turmeric in the cream, sandalwood formula was being sold.

In the meantime, Amway India knocked in India, in its initial phase, the company understood the mood of the people well, after that around the year 2000, it attacked the mind and mind of the people with full force. That is, the company showed people such a dream of becoming millionaires overnight that there was a competition to become Ambani, Tata and Birla. Amway’s meeting started in village-village, people associated with the company would come and in a meeting, 50 boxes out of 100 would be scored.

image amway

Not only this, the situation became such that Kirtan was kept at home and even before the start of Kirtan, the dream of braiding Amway’s products to earn millions and crores of rupees would have been shown to the women present in the Kirtan. What was then, many women would have agreed to be a part of network marketing and after joining would start network marketing for Amway. Whether it was toothpaste to clean teeth, cream to be fair, be it surf or soap, would have started selling many products.

A large section of India had gone out to become rich, under this Amway earned 27 thousand 562 crore rupees from its business operation during 2002-03 to 2021-22. Out of this, he gave seven and a half thousand crore rupees as commission to his distributors and members of America and India.

That is, when a little money came from the share of the people, then people were very happy. No one has thought that why toothpaste for ten rupees is being available for 100 rupees. Just after becoming a member, people would start drinking the blood of their acquaintances and relatives. Not only this, one even said that his uncle insisted in front of his father that he should first become a member of Amway, then he would take his aunt to his house.

Soon, there were about 60 lakh agents in India who are involved in the work of direct selling to earn extra income. But understand the connected anecdote also, the new member was buying the products not to use, but to become rich by becoming a member because its upline members i.e. the members at the top show similar dreams.

That is, the company, which brought Rs 20 crore as share capital in India in 1996-97, sent about two thousand eight and a half hundred crores till 2020-21 in the name of earning royalty and other payments to its investors and parent entities.

If only profit is being sold in 10 goods, then the company has now come up with a new scheme, pyramid scheme, the formula of this scheme is the same old, in which a person joins a company and adds more people to himself, in return for which he gets money. Huh. The pyramid scheme works in the shape of a pyramid. There are some people at the top, who go on adding agents below it. That is, the number of investors or members in the pyramid scheme increases like the layer of the pyramid.

In this, the fraud happens in such a way that only the people at the top get the benefit of earning in the name of joining fee from the people joining below it.

Now in such a situation, the question becomes that the company was doing this work for many years that 3 agents under the agent, then three agents under them, what happened now?

Actually till now the company was in direct selling where the customer used to pay money to buy the product but now money is asked in the name of joining the company i.e. joining fee in pyramid scheme. And to make the pyramid scheme look like direct selling, the sale of products is also pretended in this too.

That is, after joining, buy these products, the joining fee is separate and the product fee is separate. For example, if you become an agent, then you are fooled by the sellers by pretending to sell bad products and services in the name of direct selling. Because of this, the direct selling industry also comes under the scanner.

Amway also came ED found in investigation that most of the products offered by Amway are priced much higher than the popular products of reputed manufacturers available in the open market. That is, if a branded company’s shampoo is 50, then why Amway’s shampoo is 150 rupees.

Second, such a scheme is likely to collapse at one point or another because such products and services are sold in it that do not exist i.e. look like this hair growth shampoo, the hair will come back in 15 days when it is just a picture. Actually there is no such product. That is, the pyramid scheme is a scam to make money for some people, which is based on selling false promises and connecting more and more people to it.

In December 2021, the central government had issued new rules for direct selling companies under the Consumer Protection (Direct Selling) Rules. Under this, these companies were declared illegal to promote pyramid scheme and register any person in such scheme under the guise of direct selling business, but in India, anything goes, and in this trend of becoming rich, Amway made common people Looted so much that not even a thousand husband could become a millionaire husband. But Amway definitely became a billion-trillion husband company, but now ED has taken a big action against Amway, the company’s assets worth Rs 757 crore have been confiscated.

By-Rajeev Choudhary

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