Diageo India's CEO summoned by Delhi city police in liquor payments case

United Spirits

26/07/2024 05:19

(Repeats Thursday's story without changes)

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      Diageo India CEO asked to appear before police on Friday
-notice
    

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      Probe linked to liquor discounts to government agencies
-source
    

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      Diageo India listed as United Spirits in India
    

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      Diageo India says it will cooperate with investigation
    

  
    By Aditya Kalra, Arpan  Chaturvedi
       NEW DELHI, July 25 (Reuters) - The CEO of Diageo's
Indian business has been summoned by New Delhi anti-corruption
police investigating billing and discount practices involving
government agencies running liquor retail shops between 2017 and
2020, according to a source and a police notice seen by Reuters.
    Hina Nagarajan, the CEO of United Spirits  UNSP.NS , has
been asked to appear before police on Friday and provide several
documents related to company sales, according to a confidential
July 4 police notice to the CEO seen by Reuters.
    "You are hereby directed to appear in person or through a
company representative ... for joining (the) investigation,"
said the notice. 
    Nagarajan, who is also a member of United Spirits
majority-owner Diageo's  DGE.L  global executive committee, did
not respond to Reuters requests for comment. Diageo owns about
56% of United Spirits which is also known as Diageo India.
    A spokesperson for Diageo India confirmed receiving the
Delhi police notice and said the company would fully cooperate
and was "in the process of providing the information sought". 
    "We are in the process of sending in an authorised
representative, as sought in the notice," the spokesperson
added, saying the company could not comment further as the
investigation was ongoing.
    A liquor industry source with direct knowledge of the matter
said the Delhi investigation concerned how companies like Diageo
India supplied liquor to government agencies which ran retail
shops, and how those agencies sometimes offered early payments
to suppliers who offered discounts.
    The police is investigating whether there was any wrongdoing
in this process and has called the United Spirits CEO as a
witness, the source added.
    The July 4 police notice asked Nagarajan to explain "whether
the discount given to the corporations (government agencies) was
in accordance with excise policy", the document shows.
    Delhi city police and the chief minister's office did not
respond to Reuters queries. A senior police source said the
investigation was ongoing.
    The Indian capital remains a major market for premium liquor
brands given its appeal to tourists.
    Euromonitor estimates Diageo, the world's biggest spirits
maker which sells the Johnnie Walker scotch whisky, is also
India's largest with a 19% market share by volume in the $35
billion market. 
It competes with Pernod Ricard  PERP.PA , though the French
company has been unable since late 2020 to sell alcohol in New
Delhi - which accounted for 5% of its Indian sales - after
authorities rejected its attempt to obtain a licence.
    The nine-point July 4 police notice also sought invoice
details from United Spirits in respect of sales and payments
received from Delhi city agencies during April 2017 and March
2020, and the name of the company employee who collected
payments.
    Police also asked the company for bank statements of that
period, it shows.
     
        

(Reporting by Aditya Kalra and Arpan Chaturvedi; Additional
reporting by Chris Thomas; Editing by Emelia Sithole-Matarise)
((aditya.kalra@thomsonreuters.com; @adityakalra;))