United Spirits Denies Misleading Reports About CEO Being Summoned, Promises Cooperation in Routine Probe

United Spirits Clarifies CEO Summoning Reports:

United Spirits Limited, part of Diageo India, has addressed reports claiming that their CEO, Hina Nagarajan, was summoned by Delhi police over liquor payments. The company called these reports misleading, stating they misrepresented a standard regulatory procedure.

Stock Impact:

On July 26, 2024, United Spirits’ shares fell by 1.46% to ₹1,424 on the BSE.

Company’s Statement:

In an exchange filing, United Spirits explained that the notice from the authorities was a routine request for information and not specifically aimed at the CEO. The notice, which covered operations from 2017 to 2020, required a company representative to provide details. United Spirits noted that similar notices were likely sent to other manufacturers as well. The company emphasized its commitment to regulatory compliance and called the headlines suggesting otherwise irresponsible.

Investigation Context:

The initial Reuters report suggested that Nagarajan was summoned by Delhi’s anti-corruption police to investigate billing and discount practices with government liquor shops. The report indicated that Nagarajan was asked to provide documents related to sales during the specified period. United Spirits confirmed receiving the notice and stated that an authorized representative would comply.

Industry Impact:

The Delhi police investigation focuses on the discount practices of liquor suppliers to government-run retail shops. This inquiry aims to check for any wrongdoing in offering early payment discounts. Delhi is a key market for premium liquor brands, contributing significantly to Diageo’s market share in India. Diageo, known for brands like Johnnie Walker, holds a 19% market share in India’s $35 billion spirits market, competing with Pernod Ricard, which has faced licensing challenges in Delhi since 2020.