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November 14, 2022

Pernod Ricard India executive ‘arrested over liquor licence cartelisation allegations’

Benoy Babu is accused of a playing a role in perpetuating a liquor scam in Delhi.

By James Beeson

An executive of Pernod Ricard’s Indian business unit has reportedly been arrested and sent to custody in a probe related to the Delhi city government’s now scrapped liquor policy.

Benoy Babu is accused of playing a role in perpetuating a liquor scam, as well as being in possession of government excise policy documents before they were made public, Reuters reported. He has been sent to custody for a week while awaiting further sentencing.

Lawyers representing Babu said the Pernod Ricard executive did not share the documents with anyone and was forwarded them on the WhatsApp messaging platform, according to Reuters.

Babu – who occupies the role of general manager, international brands at Pernod Ricard India according to his LinkedIn profile – was arrested alongside Sarath Reddy, a director of multinational pharmaceutical company Aurobindo Pharma. The arrests were made by India’s federal financial crime-fighting agency Enforcement Directorate (ED).  

Local media outlet The Indian Express reported Babu’s arrest was due to the alleged role played by the executive (alongside Reddy) in the “cartelisation” of liquor licences, with permits allegedly “given to a select few [retailers] deliberately”.

Just Drinks has contacted Pernod Ricard for comment.

Last month, the ED reportedly raided several liquor companies, suppliers and distributors while investigating money-laundering allegations relating to the Delhi city government’s short-lived excise policy.

The policy – which would have brought significant savings for consumers in the form of buy one, get one free offers and discounts – was scrapped earlier this summer following widespread allegations of corruption in the allocation of liquor licences.

Since 1 September, Delhi has reverted to its old excise scheme and only government liquor shops are presently able to open in the city.

Last month, Indian authorities demanded Pernod Ricard India pay US$244m for allegedly undervaluing concentrate imports for more than a decade to avoid its full tax obligations.

The allegations relate to the value of liquor concentrates imported by Pernod Ricard India from the parent company’s UK-based subsidiary Chivas Brothers.

Pernod Ricard India has said it is “actively working” to clear itself of any wrongdoing.

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