Civil, constructive ways needed to handle disputes: Amway

Hitting out against the arrest of its three top executives in India, US-based Amway today said "more civil and constructive ways to handle consumer disputes" are required in India.

The direct selling major also said while it has adapted its business model to local regulations elsewhere in the world, but in case of India "clarity of regulation" was required.

Last week Amway India's three officials, including the India CEO William Scott Pinckney, were arrested on charges of financial irregularities but were later granted conditional bail."This (the arrest) was certainly not fair to our three affected employees, and we hope there are more civil and constructive ways to handle consumer disputes in these markets going forward," Amway Corporation President Doug DeVos told PTI in an e-mailed interview.

Amway certainly respects local authority "but we do not agree with their interpretation of the Prize Chits law."This unfortunate situation brings even greater importance and timeliness to the need for fair and balanced legislation that allows honest, ethical direct sellers to operate and invest in India without such distractions," he added.

Direct selling companies in India have been seeking a separate regulatory framework for the sector in order to demarcate it from fraudulent pyramid and ponzi schemes.

The companies have sought exclusion from the Prize Chits and Money Circulation Scheme (Banning) Act (PCMC) of 1978 and have demanded a separate regulation to govern the direct selling sector.

When asked whether the company plans to quit the Indian market, specially the states in which the company has faced problems, DeVos said: "We have never left a market and we will remain committed to helping others understand the legitimacy of our business model..."

On the other hand, as part of strengthening its presence in India, DeVos said: "Amway will begin building its first manufacturing plant in Tamil Nadu, India, later this year. Nutrition, beauty and personal care products will be manufactured at the site. The $95 million facility is scheduled to be completed in 2015."

When asked if Amway was open to tweaking its business model to meet requirements of the Indian regulations, he said:"We continuously improve our business as we strengthen older markets with the best practises tested in newer markets. In this case, however, we feel the solution is clarity of regulation, where direct selling of products and services appears to be excluded from the law under which we are challenged."

DeVos further said Amway had amended its business model to the marketplace in many countries, such as China, the US and in many countries in Europe where it has seen "changes to operations to reflect the updated needs of the consumer, or the regulatory environment".