Follow-Up: Amway & India’s Out-of-Touch (In)justice System

William Pinckney Amway arrestMore than a month ago, I wrote about the “arrest-now and ask-questions-later” approach by authorities in India who arrested Amway India Chairman and CEO William S. Pinckney.

It was the second such arrest in about one year as a result of authorities’ apparent interpretation that Amway had violated the nation’s Prize Chits and Money Circulation Schemes (Banning) Act. This came despite Amway’s international reputation as a leader in the direct-marketing industry for more than a half-century.

Sad to say, the kangaroo-court nature of India’s laws, and how they administer them, has only grown over the past five weeks: Bill Pinckney is still in jail.

A July 13th story in the Economic Times included a statement from Amway in which the company called for a revision to the PCMCS Act “to clarify that it does not cover sales of real products and services.”

The corporation also attacked the First Information Report (FIR) system in India—the complaint that sets the process of criminal justice in motion.

“The FIR system that has resulted in this gross miscarriage of justice and deprivation of Mr. Pinckney’s human rights must be reviewed and reformed,” reads part of Amway’s statement. “…the actions (resulting in Mr. Pinckney’s arrest and incarceration) over the past two months have also shined a light on the potential for abuse in the FIR system, and when legislation such as the PCMCS Act gives investigating officers the powers to seize, seal and arrest, based on complaints that were filed by persons who cannot even be said to have been personally affected.”

To compound the injustice of the situation, the Economic Times reports that although the CEO has been granted bail, he has not been released because the company is still in the midst of “fulfilling bail formalities.”

Not sure what that refers to, but it sounds like yet another backwards link in this messed-up chain of events. At the heart of it all is a misguided application of an outdated law that did not anticipate the arrival of direct-selling companies. Amway, for example, opened in India in 1998.

As the American Chamber of Commerce in India (Amcham) stated shortly after the late-May arrest, “The PCMCS Act was enacted more than 20 years before direct selling companies like Amway, Oriflame, Avon, and Tupperware entered India.”

“The Act in its present form is unable to distinguish genuine direct selling companies from pyramid or Ponzi schemes,” Amcham India Executive Director Ajay Singha is quoted as saying. “Like other countries, India needs to amend this act and create a conducive legal environment for the Industry,”

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