Diageo office raided by DRI for evading import duties

After failed talks with United Spirits for a strategic alliance, drinks’ manufacturer Diageo is in news again. Their India unit was raided yesterday. Vineetha Athrey and Ashwin Mohan report.

Below is a verbatim transcript of their comments on CNBC-TV18. Also watch the accompanying video.

Diageo India’s Lower Parel office in Mumbai was raided yesterday by the Directorate of Revenue Intelligence officials. According to sources, 12 of the top officials at Diageo India were questioned yesterday till as late as 4 in the morning. Some of them include the Managing Director of Diageo India, Roland Abella; Director of Finance Mike Slymm as well as marketing director Santosh Kanekar.

Sources have told us that the reason for this is that Diageo has not paid full duties for its products especially Scotch Whisky, “Johnny Walker Black Label” and top level company sources have also told us that this tax evasion could be upwards of Rs 100 crore and done over a few years and not just one–two years.

Some of the top brass of Diageo India quit and moved on in March 2009. Sources told us that this also happened because the top management got wind of this tax evasion and did not want involve themselves with the company any more.

We checked with Diageo and they said that we can confirm that the Diageo Office in Mumbai was visited on the November 17, 2009 by Customs and Revenue Authorities. Diageo is not aware of the purpose of any enquiry by the Indian Customs Authorities. Diageo says that business today is back to normal.

Read page 2 for Ashwin Mohan’s comments...