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Kurnool: A Kurnool district court on Tuesday sent William S. Pinckney, chairman and chief executive officer (CEO) of Amway India, in 14-day judicial custody, after he was arrested by Andhra Pradesh police in connection with a criminal case registered against the direct selling company.

Kurnool Superintendent of Police (SP) Raghurami Reddy said 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 kms from Kurnool) which remanded him in judicial custody for two weeks. A bail petition was moved in the court, which was rejected and the case has been posted for arguments on 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 on Tuesday, said 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.

Meanwhile, the Kurnool police filed a petition seeking Pinckney’s custody for 10 days to facilitate further questioning. The petition would come up for hearing on Wednesday.

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. PTI

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