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Pernod Ricard India denied allegations by India’s Enforcement Directorate that it violated the city’s liquor policy, according to Reuters.
According to India’s Enforcement Directorate, Pernod India financially supported retailers who stocked more of the company’s brands and boosted its market share.
Pernod India allegedly provided corporate guarantees worth $25 million in 2021 to its banker HSBC to facilitate loans to retailers, who used the funds to bid for liquor store licenses in New Delhi.
The Delhi government’s policy prohibited manufacturers from participating in retail sales directly or indirectly, which Pernod contravention by effectively usng bank guarantees to invest in retailers.
Benoy Babu, Pernod India’s head of international brands, was arrested in November for allegations of money laundering under Indian laws and violating Delhi’s liquor policy but has not been charged.
Babu insists his arrest was “illegal,” and he played no role in Pernod’s decision to extend corporate guarantees.
