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Scrutiny
 
DEFENCE: CORRUPTION
Can MoD ban Diageo?
Banning six defence suppliers is a good start; but why isn’t the Defence Ministry banning Diageo?
Issue Date - 30/04/2012
 
The recent allegations by outgoing Army Chief General V. K. Singh about an attempt to bribe him have unfortunately raised more questions than answers. Trace back just a few weeks and the can is open. In early March 2012, the defence ministry blacklisted six vendors that included four foreign defence contractors for their involvement in the 2009 Ordnance Factory Board scam.

That’s a good start. But what is mysteriously suspicious is that the Ministry has continued to deliberately ignore the clear case of liquor giant Diageo (owns Johnie Walker Scotch Whisky, Smirnoff Vodka and others).

In July 2011, the US Security and Exchange Commission (SEC) slapped fines of $16 million on Diageo convicting it for bribing government officials in India and other countries. The SEC further confirmed that $1.7 million worth bribes were paid in India. The SEC ruling that is available with B&E (Release No. 64978 / July 27, 2011) confirms, “In India, from 2003 through mid-2009 Diageo – through Diageo India Pvt Ltd – made over $1.7 million in illicit payments to hundreds of Indian government officials responsible for purchasing or authorizing the sale of its beverages.” Bribes were paid to Indian CSD (Ministry of Defence) canteen employees, Label Registration and Excise Officials across India. While the US government has convicted Diageo, why is it that the Indian Ministry of Defence continues to ignore the issue? Is it because Diageo’s India ‘advisory’ board consists of Naresh Chandra, a former cabinet secretary, defense secretary, advisor to PMO? Well, well, if shame has to have an analogy, look no far...

 

          

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