Welcome to new India! Law holds for US MNC honcho too

Kurnool Superintendent of Police Raghurami Reddy said that Pinckney was arrested in Gurgaon on Monday and was brought to Kurnool on a warrant, responding to a complaint alleging financial irregularities in Amway's operations.

‘The CEO has been booked under the Prize Chits and Money Circulation Schemes (Banning) Act besides charges of cheating as well as extortion under relevant sections of the Indian Penal Code (IPC),’ the police official said.

Incidentally, this happens to be the second time that the Amway India CEO has been taken into custody, after the Kerala police arrested Pinckney as well as two Amway directors earlier, for alleged financial irregularities. Pinckney was produced in a court in Dhone town (about 50 km from here) which remanded him to judicial custody until 7 June.

A bail petition was moved in the court, which was rejected and the case has been posted for arguments till Wednesday.
Pinckney has been shifted to a prison in Kadapa district, another police official said.

Reacting to the development, Amway, in an official statement released here on Tuesday, said that it was ‘aggrieved and shocked’, since the arrest was ‘unwarranted’ and the case against which action has been taken was filed in December 2013.
‘The company had no prior information on the same. Allegations mentioned in the FIR are frivolous and gives a misleading impression about our business,’ Amway's official statement said.

Amway claimed that as a ‘law abiding’ corporate, it had always cooperated with investigations, and had responded to all queries and documentation. So far, Amway had furnished all information and documents sought by police officials, the company said. The India Direct Selling Association (IDSA) criticised Pinckney’s arrest under the PCMCS Act, saying it sent out a wrong signal to global investors.
‘Today (Tuesday) is the first of the new government and you arrest a CEO of an MNC here. What kind of signal does the government want to send outside (overseas investors)?’ IDSA Secretary General Chavi Hemanth said.
 Meanwhile, the Kurnool police filed a petition seeking Pinckney's custody for ten days to facilitate further questioning.
In a statement, the Andhra Pradesh police said that after a complaint in 2006, the state CID had registered a criminal case against Amway which in turn approached the Andhra Pradesh High Court requesting a declaration that its scheme does not fall under provisions of the the Prize Chits and Money Circulation Schemes (Banning) Act, 1978.

However, a Division Bench of the High Court held that Amway's scheme is an illegal money circulation scheme and fell within the ‘mischief of definition of money circulation scheme’.

Subsequently, the Supreme Court also dismissed the special leave petition filed by Amway, the Andhra police statement said.
The Kurnool SP said that the police had registered an FIR based on a complaint lodged by advocate Jagannath Reddy in December 2013.