Amway willing to ‘tweak’ Indian business model after CEO Pinckney’s arrest

Following the arrest of  by the Andhra Pradesh police on rather opaque charges of operating a money-skimming scam, the global direct selling firm today said it can "tweak" its business model if the finance ministry guidelines demand this.

Pinckney was arrested on 26 May under the contentious Prize Chits and Money Circulation Schemes (Banning) Act, with allegations of improper money circulation. He is still in custody.

"It appears some misconceptions exist about Amway running some kind of a chit fund or Ponzi scheme ... if finance ministry officials feel we need to tweak our business model we will be happy to do so," Behl, who flew to Delhi to argue his company's case, said.

The company will retain its direct selling character and its products will not be available in grocery stores. "If any of our business practice creates confusion for law makers then we are happy to change that," he said.

Amway's business model is based on a direct retailing system where each member is required to add new members apart from directly selling the company's products, with new members adding to the revenue stream of older members. Such schemes are popular and fully street-legal in developed markets.