NEW DELHI: India’s central investigating agency has raised serious allegations against liquor company Diageo and investment firm Sequoia Capital, accusing them of making questionable payments to a political figure in hopes of gaining favorable government decisions. This information was revealed in a document reviewed on Friday.
The Central Bureau of Investigation (CBI) claims that Diageo Scotland transferred funds to a firm owned by Indian politician Karti Chidambaram following a 2005 ban on the sale of its duty-free products, which significantly impacted sales of its popular Johnnie Walker whisky.
According to the agency’s findings, a payment of $15,000 to Chidambaram’s firm was allegedly meant to influence officials to lift the ban on Diageo’s products, rather than being for legitimate consulting services, as initially claimed.
The CBI’s document indicates that Diageo Scotland sought assistance from Karti P. Chidambaram to have the ban removed. This investigation is part of a larger inquiry that began in 2018 concerning investment approvals.
The exact date of the reported payment by Diageo has not been disclosed. The agency noted that the company faced significant financial setbacks due to the 2005 ban imposed by the India Tourism Development Corporation, which monopolized the sale of imported duty-free liquor and is majority-owned by the government.
Attempts to reach Karti Chidambaram, who is a member of India’s opposition Congress party and the son of former finance minister P. Chidambaram, for comments were unsuccessful.
A representative from United Spirits, Diageo’s Indian subsidiary, which is predominantly owned by the British company, declined to make a statement regarding the allegations. Furthermore, Diageo’s headquarters in the UK has yet to provide any comments on the issue.
This situation adds to the challenges Diageo faces, as anti-corruption authorities began investigating the company last year over its billing and discount practices in New Delhi. The company has stated that it is cooperating fully with this inquiry.
In addition, the CBI’s documents also implicate the Mauritius division of Sequoia Capital in questionable transactions involving Chidambaram’s firm. It is alleged that these dealings were aimed at influencing public servants to approve an investment in India back in 2008.
