Amway in hot water in Hyderabad over "business model" controversy

The central economic enforcement agencies have also been brought in to investigate the matter, they said.

A representative of Amway told CNBC-TV18 that they will be contesting the CID claim.

For long, Amway has been dogged by controversy with many critics claiming that it has a cult-like following.

The organization, which is a multi-level marketing (MLM) scheme, has drawn frequent complaints, bad press and often-contentious litigation.

Nevertheless, Amway has made its two ruling families, the Devos and Van Andel clans, billionaires.

In recent years sales and recruitment for the company have slowed in the United States. In an apparent effort to improve its sagging situation Amway launched Quixtar on the Internet and also moved into international markets like China, Africa, Malaysia and India where details about its troubled history remain largely unknown.