Dear paisaworld viewers,
As everyone know that we all Speak Asians are going through a lengthy legal battle which has come to almost on a conclusive point, we thought of publishing our research on the legal cases and judgement pronounced regarding our business across the world. Since Amway is considered as the mother of all Network marketing companies and also which has fought and won most of the legal cases across world, we have taken it as our case study.
In a 1979 ruling,the Federal Trade Commission (USA) found that Amway does not qualify as a pyramid scheme because distributors were not paid to recruit people and had to sell products to get bonus checks, and the company was committed to buying back its distributors' excess inventory.
In May 2007, the UK Department of Trade and Industry (DTI) accused Amway and distributor organizations Britt World Wide and Network TwentyOne UK of "objectionable practices" and petitioned to wind up the companies. The case against Amway was dismissed in 2008 on the condition that a full earnings disclosure is published publicly, no registration or renewal fees are charged and that the sale of business support materials are prohibited.
Back home in India in September 2006, following a public complaint, Andhra Pradesh state police (CID) initiated raids and seizures against Amway distributors in the state, and submitted a petition against them, claiming the company violated the Prize Chits and Money Circulation Schemes (banning) Act. They shut down all offices of firm Amway. The enforcement said that the business model of the company is illegal. The Reserve Bank of India (RBI) had notified the police that Amway in India may be violating certain laws regarding a "money circulation scheme" .
Following a petition by Amway, the state High Court issued an injunction against the CID and stated the Act did not prima facie apply, however after Amway requested the CID petition be dismissed the High Court declared that if police allegations were true, Amway's Indian subsidiary would be in violation of the act and the investigation should continue. On August 14, 2007, the Supreme Court of India ordered the state police to complete the investigation against Amway in 6 months. In 2008, citing the High Court decision, the Andhra Pradesh state government enacted a ban on Amway media advertisements. Amway challenged the ban and in July 2009 the AP High Court refused a petition the ban should be enforced. As of June, 2009 the original 2006 CID case was still pending at the Chief Metropolitan Magistrate Court in Hyderabad.
On August 6, 2011 Kerala Police sealed the offices of Amway at Kozhikode, Kannur, Kochi, Kottayam, Thrissur, Kollam and Thiruvananthapuram following complaints. The Kerala High Court on 9 November directed the DGP, Kerala Police to file a statement regarding the status of the investigation initiated against the multi-level marketing companies. A Division Bench comprising Acting Chief Justice Manjula Chellur and Justice C N Ramachandran Nair issued the directive while considering a petition challenging the government order regarding the Kerala direct selling regulations.
One of the most important fact which you all would have noticed in the article is that the law across the world is against "Payment of money on recruitment of People in chain". In India it is banned by Prize Chits and Money Circulation Schemes (banning) Act, 1978. Now in case of Speak Asia to restart the business, only thing the learned counsel of the company has to prove in the court of law is, SAOL doesn't pay on recruitment of people. In our view this can be proved without doubt in case of SAOL business model because here "referral is Optional and not Compulsory". Further each and every panelist is paid only for his/her work done.
From the order of the honorable supreme court on 14th Nov, 2011(where a mediator has been appointed for an amicable settlement of issue among parties) it looks like the major victory is almost achieved because in the order there is no mention of SAOL being accused of (1) "distributing quick or easy money" or (2) "Making payment for recruiting people". The court has felt that its a genuine business dispute and should be solved peacefully between the parties concerned. In our opinion it looks like SAOL will definitely be able to restart its business very soon.
