Carlsberg's warring partner in its India joint venture urged the Denmark-based brewer on Wednesday to boost governance standards, saying it has had "grave concerns" for years over operations in the south Asian nation.
Since at least 2019, the partner, Nepal-based Khetan Group, and Carlsberg have been embroiled in a commercial dispute, amid an internal inquiry into the brewer's local practices that sparked a boardroom battle.
In its first public comment since the dispute began, the Khetan Group's holding firm, CSAPL (Singapore) Holdings Pte Ltd (CSAPLH), urged Carlsberg "to honour its obligations to improve governance and act in the long-term interests of the business".
Suspected governance issues prompted the resignation of Carlsberg India's auditor and the launch of an inspection of its financial accounts by Indian authorities, the joint venture partner added in its statement.
It said that for several years it had "consistently expressed grave concerns over suspected irregularities and illegalities at the joint venture company’s India business".
Carlsberg, one of India's biggest beer companies, with a share of about 17% of a $7-billion market, did not immediately respond to a request for comment.
It has previously blamed the auditor's decision to quit last year on "highly disruptive" side-effects of the commercial conflict with its joint venture partner.
Auditor's Resignation
Reuters reported the auditor's resignation in November, after the firm, an affiliate of PriceWaterhouseCoopers, had declined for two successive years to give an opinion on the joint venture's financials.
Carlsberg is also under scrutiny from India’s antitrust authority, which has said the brewer colluded with other companies to fix beer prices, although a final ruling is awaited.
An investigation into accusations of unlawful practices at Carlsberg India found potential improper payments to government officials and other regulatory lapses, while another found child labour issues at a warehouse, Reuters reported in January.
In response, Carlsberg had said it could not rule out breaches of policies and its code of conduct and did everything possible to prevent such incidents.
News by Reuters edited by Donna Ahern, Checkout. For more Drinks stories click here. Click subscribe to sign up for the Checkout print edition.
