Direct-marketing giant Amway’s India chairman and CEO William S. Pinckney and two company directors were arrested on Monday in the state of Kerala, in southern India, on charges of financial irregularities, police said.

The arrests were made on a warrant issued in three different cases registered by Wayanad district crime branch in 2011 on charges of violation of the Price Chits and Money Circulation Schemes (Banning) Act, Press Trust of India, or PTI, reported, citing police sources.

Police had questioned Pinckney and directors Sanjay Malhotra and Anshu Budhraja earlier this month and asked them to report on Monday for further questioning. The trio was interrogated by the Economic Offenses Wing at the police station and later arrested.

"The chief executive officer and two other officials, Anshu Budhraja and Sanjay Malhotra, were arrested by the Wayanad police on charges of money-chain activity and laundering. They were taken to Wayanad and will be produced in court on Tuesday," CA Walson, superintendent of police of the state economic offenses wing, was quoted as saying by Hindustan Times, or HT.

The arrests were made based on the complaint of a woman who claimed she had incurred losses, due to the company's fraudulent practices. Four cases have been registered in two districts -- three in Wayanad and one in Kozhikode -- against Pinckney, a U.S. national.

Amway India Enterprises has been accused of selling low-priced products at inflated rates in the state. Last November, police raided Amway warehouses in various districts of the state and seized products worth 24 million rupees (about $450,000), following complaints that the firm was taking huge sums in advance from customers and representatives. The company’s Kerala state manager Rajkumar was arrested and warehouses were sealed.

Investigators found that the company had forced distributors to buy products at higher prices in violation of the guidelines and the police were working on leads that millions of rupees collected fraudulently from dealers were invested in the insurance business, according to some media reports.  

Reacting to the arrests, Amway said it was doing business within the guidelines set by the government and an official release from Amway, as reported by PTI, said the company had provided the information and documents requested by the police. "We are cooperating with the police for any further investigations in other matters as well," the release said.

"With respect to the Wayanad case of 2011, for which it is believed that arrest warrants have been issued, the company or its officials were not issued any summons to join the investigation, nor was any information sought... The company management would have been happy to cooperate with the Wayanad Police... as we always have as law abiding corporate citizens, followed all laid down laws of the land," Amway said in a statement on Monday night.