“The company had engaged an independent third party to carry out an internal investigation on the Delhi Excise policy issue which highlighted certain findings including involvement of certain employees in activities relating to formulation and implementation of Delhi Excise Policy 21-22 and engagement with government officials and other third parties/alleged key conspirators/specific distributors/retailers,” Pernod said in its latest annual filings with the Registrar of Companies. It added that these findings are not conclusive in nature, given the ongoing investigation and are subject to interpretations by the legal counsel.
The French alcobev firm’s license in Delhi was not renewed after investigating agencies named the company in a case of alleged corruption and cartelisation linked to the excise policy. Former Delhi deputy chief minister Manish Sisodia had been arrested by the Central Bureau of Investigation in February for his alleged role in the same excise case.
“We are currently assessing the conclusions of the third party. Furthermore, as the matter is sub-judice, we are unable to comment on the allegations made by the ED and on the findings resulting from the internal investigation. In line with its local and international standards, Pernod Ricard India has been very solicitous about its legal and ethical obligations, including fully co-operating with government agencies in the investigation of the Delhi Excise Matter, ” said a Pernod Ricard India spokesperson.
In November 2021, the Delhi government decided to exit the liquor vending business and handed it over to private companies. However, last year, it reverted to the old policy. According to investigative agencies, the policy promoted cartel formations through back doors, and provided for exorbitant wholesale profit margins at 12% and retail margins of 185%.
The ED alleged that the Pernod Ricard, which owns Blenders Pride and Royal Stag, indulged in retail cartelisation, money laundering, wrongful declaration of price and also took global approval on corporate guarantees to support vendors and create conditions to have strategic advantage in 20 out of the 32 proposed zones in Delhi.
“Based on legal counsel’s review of the complaint, the company’s exposure in terms of civil liability under PMLA could be equivalent to ‘5,637 million as quantified in the ED’s complaint, though the final outcome cannot be determined with any degree of certainty at this stage,” Pernod added.