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Amway India finds it difficult to sign up new distributors

LiveMint logoLiveMint 05-06-2014 Suneera Tandon

New Delhi: Amway India is finding it difficult to sign up new distributors after the arrest of the company’s India head William Pinckney last week, said top executives at the company.

“Post the arrest, we have seen a short-term blip in new distributor sign ups. There is definitely a concern among our new distributors,” said Samir Behl, regional president, Europe, Africa and India. “Our focus right now is to get a bail for Pickney and ensure that these episodes do not repeat themselves.”

A Kurnool district court sent William S. Pinckney, chairman and chief executive officer (CEO) of Amway India, in 14-day judicial custody, after he was arrested by Andhra Pradesh police in connection with a criminal case registered against the direct selling company.

Pickney was booked under the Prize Chits and Money Circulation Schemes (Banning) Act 1978 (PCMCS).

The direct selling industry in India—a business model that allows people to become members of the company and sell products to other people directly instead of through stores—is not covered under a legal framework, but is monitored under PCMCS.

Behl added that the company was reaching out to various ministries and initiating conversations to either amend the PCMCS law and allow a window for direct selling company’s such as Amway or frame guidelines that exclusively monitor the functioning of the direct selling companies in the country.

Despite the allegations, India remained a focus market for the American company, said Behl.

“In the long run India remains a fundamental growth business. The country ranks in the top 10 countries in terms of revenue, India can easily be the top five markets for Amway globally,” he added. In 2012, Amway India clocked a turnover of Rs2,288 crore.

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