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3 directors flag discrepancies at Carlsberg
These developments indicate how shareholder disputes in a company could split the board of directors, leading to regulatory attention.
The government has ordered an inspection of Carlsberg India’s books after three of its directors filed complaints and the statutory auditor of the company exited, two government officials told Mint.
The three directors approached the authorities in 2019 and 2020 to complain about the beer maker’s promotional schemes.
The statutory auditor for FY19 and FY20—Price Waterhouse Chartered Accountants LLP—quit the audit assignment last year.
The auditor has in a detailed communication to the ministry of corporate affairs explained that it was unable to express an opinion on the financial statements following a difference of opinion among directors on the board and among shareholders, said a third person aware of the developments.
These developments indicate how shareholder disputes in a company could split the board of directors, leading to regulatory attention.
“We have received internal complaints about the company and have ordered inspection of books to see if these have merit,” one of the two government officials cited above said.
An inspection of books is a broad verification of the accounts and financial statements to see if there are any discrepancies. An investigation, which is far more intense, follows only if the inspection throws up discrepancies.
“PW cannot comment as it is bound by confidentiality,” an external spokesperson for the auditor said in response to an emailed query.
Emails sent to the ministry of corporate affairs and Carlsberg India remained unanswered at the time of publishing.
Internal disagreements in Carlsberg have been brewing for some time.
News agency Bloomberg said the company’s joint venture partner, the Nepal-based Khetan Group, had in 2019 written to the ministries of corporate affairs and commerce, alleging that Carlsberg India was offering illegal trade discounts.
The complaining directors had raised questions on the company’s trade discounts, promotional schemes, advertisement and sales promotion and various payments.
