ITDC, UDC in talks over scotch prices

Ex Duty-free dept head blamed

In the midst of a raging controversy over alleged irregularities in the purchase of premium scotch whisky, the India Tourism Development Board today said it had started negotiations with UDV, the manufacturer of popular brands like Johnnie Walker Black Label, for a reduction in the purchase price.

"We are negotiating with UDV. One option is to get the products from the manufacturer at a reduced price and the other is to go in for a tender process," ITDC Chairman and Managing Director Rajeev Talwar told reporters here today.

The corporation had earlier contemplated floating tenders for the purchase of the Black Label brand in the wake of reports of disappearance of the premium brand from the ITDC-run duty-free shop at the Delhi airport.

Talwar said an analysis done by the duty-free division of ITDC on the irregularities in the orders placed with UDV showed the division had violated the purchase manual in July 2003 when it confirmed to the company that their proforma invoice would be treated as a purchase order.

The division superseded the usual process of calling for proforma invoice, checking details of price and quantity.

The normal procedure is to send the proforma to a high-powered committee for internal concurrence if the value of the order exceeds Rs 75 lakh. Talwar said the change was brought about without the approval of the chairman or the finance department.

The corporation had last week suspended the vice-president in-charge of the division, RC Gupta, who had been held responsible for the "misdeeds and wrong actions", he said.

"Financial loss was caused to the corporation during the tenure of RC Gupta by deliberately hoarding merchandise and not distributing material to the 37 shops for sale in spite of the directive of the director (finance) and even a report from the CBI. Disciplinary action has been initiated against Gupta, who has been held responsible for the misdeeds," ITDC said in a release.

The release added that it had also been reported that because of the practices between 2001-02, the turnover of the division came down to Rs 71 crore from the earlier Rs 82 crore.

"This was despite the opening of new shops at Bangalore, Hyderabad, Calicut and Ahmedabad and an increase in the outbound traffic from India during the period," it added.

The manual came under media glare following the shortage of the Johnnie Walker brands in duty-free shops run by ITDC as no orders were placed after the alleged irregularities in orders placed in May last year.