India names Diageo, Sequoia Capital over alleged suspicious payments

Diageo, Sequoia Capital face influence-peddling investigation

Diageo pays to lift duty-free ban – Agency

Sequoia Capital pays investment approval agency

NEW DELHI, Jan 10 (Reuters) – India’s federal investigative agency has accused liquor giants Diageo and Sequoia Capital of making suspicious payments to politicians’ firms to seek favorable government decisions, a document reviewed by Reuters said on Friday.

The Central Bureau of Investigation (CBI) said in documents that Diageo Scotland made suspicious payments to Indian politician Karti Chidambaram’s company after a 2005 ban on the sale of Diageo’s duty-free products affected sales of its Johnnie Walker whiskey transfer.

The agency said in case documents on its website that an investigation revealed the $15,000 payment to the company was intended to influence civil servants to lift the ban on Diageo and was not for consulting work as described.

“Diageo Scotland engaged Karti P Chidambaram with a view to lifting the injunction,” the agency said in the filing, which was part of a formal case registered against Diageo and Sequoia following the launch of an investment approval investigation in 2018.

It did not say when Diageo’s alleged payment would be made.

The agency said Diageo suffered huge losses due to an embargo imposed on its products by the Tourism Development Corporation of India in 2005. The Tourism Development Corporation of India, a government-controlled company, has a monopoly on the sale of imported, duty-free alcohol.

Calls to Karti Chidambaram, son of former finance minister P Chidambaram, for comment went unanswered. He is a member of India’s main opposition Congress party and a member of the House of Commons.

A spokesman for United Spirits, the Indian unit of Diageo, declined to comment. The British giant holds about 56% of the company. Diageo’s British unit did not immediately respond to a request for comment.

The case poses new challenges for Diageo since anti-corruption police launched an investigation last year into billing and discounting practices in the capital New Delhi.

The company said it is cooperating with the agency.

Separately, CBI case documents allege that the Mauritius subsidiary of Sequoia Capital engaged in questionable transactions with Karti Chidambaram, a company that was able to influence civil servants to secure approval for investments in India in 2008.

The CBI said Sequoia’s proposal was approved by Karthi’s father, then finance minister P Chidambaram, in November. Congress politician P Chidambaram said in response to a text message from Reuters that he had no comment.

CBI case documents do not name the former finance minister as one of the accused in the case.

Sequoia did not immediately respond to a Reuters request for comment on the allegations.

A detailed investigation will look for any violation of the Indian Penal Code, including the Anti-Corruption Act, which provides penalties for bribery of public servants, the CBI added in the document.

Penalties may be up to seven years in prison and an unspecified fine. (Reporting by Arpan Chaturvedi; Editing by Aditya Kalra and Clarence Fernandez)