Amway case: IDSA requests government for immediate operational clarity

NEW DELHI: The Indian Direct Selling Association (IDSA), which represents Amway, Oriflame and Tupperware among other direct selling firms, on Friday demanded a clear policy framework from the government, following the arrest of Amway's MD William S. Pinckney and two other officials earlier this week in Kerala.

The IDSA pressed for separate legislation for direct selling firms, stating that lack of clear regulation was jeopardizing investments from overseas. It stated the arrest of Amway India's MD and directors in Kerala owing to unclear reasons had not only dazed the industry but also risked the future of lakhs of independent sales consultants.

The three Amway officials, who were subsequently released on bail, were booked under the Prize Chits and Money Circulation Schemes (Banning) Act, following a complaint filed in 2011 by three distributors.

IDSA secretary general Chavi Hemanth said: "The focus of regulation should be to identify which practices are fraudulent and it should lay down specifications for protecting consumers, distributors and direct sellers. There is no clear and holistic definition of direct selling in India and as a result, classification of direct selling is not clear."

IDSA projects that the industry, currently estimated at Rs 6,385 crore, will touch sales of Rs 10,844 crore by 2015 .

IDSA chairman Amarnath Sengupta said: "Since there's no definition in the statutory books on direct selling, many fly-by-night operators are misusing the concept. There should be provisions for licensing and registration of direct selling firms to identify legitimate companies."