Following the arrest of William S Pinckney, managing director and chief executive officer, Amway India, the US-based direct selling company has sent its regional president of Europe, South Africa and India, Samir Behl to take control of the situation.
Behl, who heads the company's operations in more than 65 countries, will stay put in India till the issue is settled. In an interview with Surajeet Das Gupta and Sounak Mitra, he says such uncalled for and unreasonable incidents do give negative signals to investors, but these could be considered as the cost of doing business as a company, which has pioneered the business model in India. Edited excerpts:
In the past one year, Amway India MD & CEO has been arrested twice based on similar FIRs. Will you continue doing business in India?
Globally, we have faced challenges in many countries. But we have never left any country and we'll not leave India. India is one of the top 10 markets by sales for Amway. We are here for the long haul and there is no change in our ongoing and future investment plans.
We are having dialogues with the officials at the central and state (Andhra Pradesh) levels. We have also asked for a meeting with the finance minister. Our officials have also met the Indian Ambassador to the US, S Jaishankar. Amway Chairman Steve Van Andel will also meet him this week.
Besides, we are having discussions with the US-India Business Council (USIBC) and US Chamber. Here, we have been discussing with the US Embassy. We have also briefed the new US Ambassador to India (interim) Kathleen Stephens about the issue. This is has become a global issue.
Do you take these as the cost of doing business?
As the pioneer in the industry and being the market leader, Amway has always faced headwinds. But we also have the first-mover advantage. Our model is sound, and we are growing at a good rate. Yes, this can be taken as the cost of doing business in such countries where there is no proper law for the direct selling industries, and in the emerging markets.
In any country, we always abide by the rules of the land. Unfortunately, there is no proper Act for the direct selling companies, and the Prize Chits and Money Circulation Schemes (Banning) Act (PCMCS) has nothing to do with what direct selling companies like Amway do.
We sell products like any other consumer goods company, and anybody can become a distributor. The fact is that our business model is different from conventional consumer goods companies.
There have been discussions between direct selling companies and the government to amend the PCMC Act in the past few years. But nothing has changed. Until then, there will be more such incidents. How do you plan to manage?
We have had long consultation with the earlier government but amendment of an Act takes time in any country. This has been delayed further due to the elections. We are hopeful with the new government. We are in dialogue with the finance ministry officials as the PCMC Act comes under it.
What do you think is the key reason for such FIRs?
We are into people's business. About 50,000 people join Amway every month as distributors. These FIRs were not filed by any of them, or by any consumer. These were filed (signed) by the advocates, and the activists. All the FIRs are well-planned and identical. We have always co-operated with all kind of investigation, and we have said that we'll co-operate.
While the investigation is carried on, the person should be relieved. You can't just keep on moving him from jail to jail. There may have been some perception issues and the misapplication of the PCMC Act. We are not into any money-circulation business. We sell products like any other consumer goods company and we give proper money-back guarantee.
There have been complaints of mis-selling of products. How do you control that?
We do everything we can. We try to prevent such things and we try to educate. We also have officials who are on the field looking into these things. And, whenever something like this is being reported to us, we have taken steps to stop that immediately.
In many countries, we have also changed or tweaked distribution model. In some cases, we decided not to permit joining from certain professional background. We keep on reviewing these, and change as and when required.
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