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

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, 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 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, 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)