REUTERS: INVESTIGATION AGENCY ALLEGED PERNOD RICARD INDIA OF MORE WRONG-DOINGS
By Susan Lewis
Source: Pernod Ricard India
India’s Enforcement Directorate, the country’s finance crime agency, accused Pernod Ricard India of illegally making profits of USD23 million by giving false costs information and conspiring to take control of Delhi city’s liquor retails by swaying the city government to privatise liquor shops, Reuters News Agency reported.
The Indian agency has earlier alleged that Pernod India has provided USD24m in corporate guarantees to its banker HSBC, which then issued loans to retailers who were bidding for the privatised liquor shop licences.
Quoting a 14,000-page court document filed by the Enforcement Directorate to a Delhi court on 6 January, Reuters said Pernod India’s then acting CFO, Rajesh Mishra, and international brands general manager, Benoy Babu, could be fined and jailed for three to seven years if found guilty.
Babu was arrested last November while Mishra has not been arrested.
Delhi city government required liquor manufacturers to disclose their lowest factory prices in the entire nation so that they can set prices for liquors in the government-run liquor shops. The filing alleged Pernod India of giving "false", higher prices, helping it earn "excess profit" of USD23m in 2021-22.
Pernod Ricard India's net profit in 2021-22 stood at USD176m, the company’s disclosures showed.
The Reuters report also said the Enforcement Directorate alleged Pernod India of conspiring to "take control of retail shops, create flagship stores" in Delhi.
It said the filing alleged that Babu was "fully involved in the conspiracy" and had sent 4,000 emails to "influence policy formulation to suit the interest of Pernod".
The emails were to back a government panel which had proposed - and later formalised into policy in 2021 - that the city government should exit liquor retail and let private players bid for liquor shop licences, the filing showed.
Delhi city government revoked that policy last year upon investigation by the Enforcement Directorate, and liquor is now sold through government-run shops again.
Responding to the latest accusations, Pernod India said in a statement to Reuters it was relying on the judicial process to demonstrate its legal compliance. It said the agency's allegations were "factually incorrect", without elaborating, and added it is cooperating with the authorities.
These allegations add to the challenges faced by Pernod India. The company is also contesting a USD250m federal tax demand for allegedly undervaluing imports, saying it disagreed with the method used to calculate the tax due.
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