Investors are suing Amway Asia Pacific, its executives and an investment firm, claiming they were forced to sell their shares four years ago when the company went private and before stockholders could reap the rewards of China's huge consumer market.
Investors said Steve Van Andel, Dick DeVos and Doug DeVos effectively forced shareholders to sell stock on the day it was announced that China would be admitted into the World Trade Organization, a decision that helped open the lucrative Chinese market to Amway and other businesses.
In addition to serving as chairman of Amway Asia Pacific, Van Andel also was vice chairman of the U.S. Chamber of Commerce, a group actively supporting China's bid.
This is an example of corporate America abusing individual investors for their own profit, said Clinton Krislov, a Chicago attorney representing the plaintiffs.
He said it was shocking that shareholders were forced out on the day China got into the WTO.
Amway Asia Pacific now is part of Alticor Inc., the parent of Amway. A company lawyer, Bert Hultink, said this has no more merit than two other lawsuits connected to the stock repurchase. Those complaints were dismissed or dropped.
The lawsuit was filed on behalf of local attorney Robert F. Wardrop II and Donald and Nancy Turnwall of Irons. They declined to comment.
When Amway Asia Pacific and Amway Japan were turned into private companies, the DeVos and Van Andel families said it was a strategic move intended to make management of the far-flung enterprises more efficient.
It was widely reported that China would be included in the WTO and shouldn't have come as a surprise to shareholders, Hultink said. The negotiations regarding China's status took more than 13 years.
I don't think the role of Mr. Van Andel was different than any businessman at the time, he said, noting that international corporate leaders backed China's admission into the trade body.
There were 56 million shares of Amway Asia Pacific; about 47 million were held by company insiders.
Although investors were paid $18 a share -- a 53-percent premium over the market value at the time, Krislov believes the stock was worth nearly $40 at the time and would be valued at more than $100 today. He said China's entrance into the WTO had a breathtaking effect on the company's value.
It is estimated there will be more than 500 million middle-class consumers in China by 2010, an enormous market that many American companies are trying to tap.
The Asian market already accounts for more than 70 percent of Alticor's sales, according to the Ada-based direct seller.