Diageo has welcomed the acquisition of a 1% stake in the company by one of China's largest state-controlled investment groups.

The stake, worth around GBP221m (US$364m), was acquired in the name of the People's Bank of China in June, Diageo has confirmed.

The source of the acquisition funds remains unclear, however.

Earlier this week, the Financial Times said Diageo had confirmed the stake buyer as China Investment Corp (CIC), which manages a foreign investment funnd of around US$200bn on behalf of China's Government.

But, CIC yesterday (23 July) denied this. Another potential source of the funding, aside from the Bank itself, is thought to be China's State Administration of Foreign Exchange.

A Diageo spokesperson said the drinks giant is "pleased" by the investment, adding: "We do not comment on individual shareholdings, but we of course view each investment as a sign of confidence in Diageo."

In its fiscal 2008, ended 30 June last year, Diageo opened a subsidiary company in China in order to build greater share in the market.

Group net sales rose by 4% in China for the year, despite a 10% decline in the first six months, with Johnnie Walker Black Label gaining an extra 3% volume share of the country's luxury Scotch whisky category.

Earlier this month, Diageo confirmed that it has dropped its annual Johnnie Walker Classic golf tournament in Asia.