NEWS
BEAM SUNTORY FINED USD19.5M BY USA JUDICIARY FOR CORRUPT ACTS IN INDIA
By Susan Lewis
29-10-2020
Credit: Adam Bouse/Unsplash
Japanese-owned spirit maker Beam Suntory, owner of Jim Beam and Maker’s Mark brands, has agreed to pay USD19.5 million to settle a bribery probe by USA Department of Justice (DOJ) over the company’s corrupt acts in India between 2006 and 2012.
The corruptions happened before the Chicago-based Beam was acquired by Japanese drinks giant Suntory in 2014 to become Beam Suntory.
The DOJ press release did not name the Indian government officials who had allegedly received the bribes.
The corrupt acts involved two executives in Beam’s Asia Pacific/South America unit, one executive and one high-ranking employee in Beam’s legal department and an executive of Beam India, all of them remained anonymous.
The prosecution agreement was deferred by three years and was unsealed on 27 October.
The DOJ said Beam had a long history of paying bribes in India. It alleged that the company had paid a bribe of Rs1million (USD18,000 at the then exchange rate) to a senior Indian government official in exchange for licence approval to bottle and sell ready-to-drink products in India.
The company was also said to have made corrupt payments to Indian officials through third-party promoters and distributors to secure orders of Beam products at government controlled depots and retail stores.
Beam was also said to have bribed to obtain prominent placement of its products in government retail stores, acquire and renew label registrations and licences, and enable the smooth distribution of Beam spirit products throughout India.
It was said that the bribes were authorised by a high-ranking executive at Beam’s Asia Pacific/South America regional business unit, who directed that the payment be made through third-party distributors in order to conceal it.
The company was also said to have intentionally failed to implement internal controls to prevent bribery. It was said to have falsified their books and records to conceal the corrupt activity.
Beam agreed to pay USD19,572,885 to the DOJ, which had reduced the fine by 10 percent in recognition of the company’s cooperation.
In July 2018, in a related matter with the USA Securities and Exchange Commission (SEC), Beam agreed to pay the SEC a USD2m penalty and interest of USD6m.
In a statement, Beam’s general counsel Todd Bloomquist said that the company began cooperating with the USA government in 2012 and took corrective action, including temporarily suspending its India operations and terminating employees who violated the company’s code of business conduct and ethics.
Company spokeswoman Emily York declined to confirm whether the five executives and employees referred to in court documents were terminated. She said the company has about 225 employees in India and will continue to do business there.
(the writer can be contacted at: info@thewinechronicle.com)
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