Now, Daigeo's duty free products are under DRI lens

Its day three of the Department of Revenue Intelligence's probe into Diageo for alleged duty evasion. Sources say Sun Tan Trading has admitted guilt and the DRI suspects more worms from the Diageo can. CNBC-TV18's Vineetha Athrey reports on what DRI is looking into now?

Sun Tan, according to sources, has admitted its guilt. It has also paid a penalty of about Rs 7.5 crore to the DRI. Sources have told us that the extent of Sun Tan's undervaluation is about 30%, Now, clearly DRI smells a rat here. It has decided to extend the probe and include some of the ex-employees as well. Today, three ex-employees from the top management who were a part of Diageo earlier were called in for questioning.

DRI has also decided to question some of the people from the duty free products range because they smell foul play here as well. Shivam Mishra from the duty free products range at Diageo was questioned today. Earlier, when Sun Tan was in the frame for this whole round of questioning, the point was just duty paid products. Now, duty free products are clearly under the scanner.

Duty free products represent about 50% of Diageo's business. Sources say the evasion here is about 2-3 times. Distributors were also being questioned. In fact distributor Mansha, the DRI suspects, has sold products at higher price. They have questioned Mansha as well. We must remember that some time back, as early as one month back, 40 people from the sales and marketing team who represent about 30% of sales and marketing population had quit. According to sources, sales are down by about 40-50%.