William S. Pinckney, CEO of the Indian arm of direct-marketing giant Amway, was sentenced to prison for 14 days on Tuesday by a district court in the southern Indian state of Andhra Pradesh, in a criminal case alleging cheating and other financial irregularities.
Pinckney was arrested in the northern city of Gurgaon, near the nation's capital New Delhi, and was transported more than a thousand miles south to the town of Kurnool, where he was presented in front of a local judge who ordered him into judicial custody until June 7. Pinckney's arrest, his second since May 2013, came after a warrant was issued in response to a complaint that accused the $11.3 billion Michigan-based company of various infractions, including cheating, extortion and irregularities in its business operations in the country.
"The CEO (Pinckney) 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)," a police official said, according to the Times of India, a local newspaper. The case against the company's India operations was filed last August.
Amway India said, in a statement on its Facebook page: “We are aggrieved and shocked at the sudden and unwarranted act of detention of our official. Due to the lack of a legal framework for the direct selling Industry, any case filed is being misinterpreted,” adding: "Amway, as a law abiding corporate, has always cooperated in such investigations, and has been responsive to the queries and documentation.”
A bail petition for Pinckney’s release was rejected but the court will reportedly hear arguments on the subject Wednesday. Meanwhile, the police also filed a petition to keep Pinckney in custody for further questioning.
“We have been compliant with all laid down laws and guidelines of Union and State Governments. We have also made an investment of more than 100 million dollars in a manufacturing facility in the country,” Amway India said, in the statement, adding: “We would like to reiterate our confidence in the judicial processes and legal system of the country”
The company manufactures and sells high-quality consumer goods and entered the Indian market in 1998, where it now has a presence in more than 4,000 cities.