Carlsberg Finds Unethical Practices, Group Policy Violations By Indian Arm

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 PwC affiliate quits as Carlsberg India auditor, avoids opinion for 2nd...


Source: Reuters

Carlsberg has said that, during an investigation carried out between 2019 and 2020, it found proof of unethical practices and group policy violations by the Indian arm. The company has also appointed a “dedicated compliance officer” to oversee compliance at Carlsberg India.

The breach was in the period up to 2018, the company said in its latest global annual report. The investigations were done by Shardul Amarchand Mangaldas and Ernst and Young, as per an Economic Times report.

“The probe found no evidence of actions aimed at personal gain for Carlsberg employees but did find evidence of potential unethical practices in breach of Carlsberg Group policies in the period up to 2018,” the Tuborg maker said.

It further said that actions taken included disciplinary measures for implicated employees still at the company and strengthening of compliance and internal controls.

Read: ‘Avoid getting caught’ – report details how Carlsberg, SABMiller and UB fixed beer prices in India

“In addition, we conducted an India wide internal audit of the process for obtaining permits and licences. This showed a clear improvement in behaviour over time, as well as identifying opportunities to further strengthen controls,” Carlsberg said.

The beer maker also stated that it had also identified a case involving child labourers and non-compliant working conditions in a warehouse operated by a third party.

“We identified this through internal monitoring processes at the time and took immediate action, terminating the contract with the third-party provider in 2018,” it said in the annual report.

Read: Carlsberg India probes find ‘potential improper payments’, child labour
A May 2018 Ernst & Young internal report on an audit of two Carlsberg warehouses found underage labourers at a location in Jharkhand.
Calling it a “high” risk finding, EY said 24 of 41 workers there were under 21 – the legal minimum age of employment for those engaged in alcohol sales in the state – with some as young as 16 to 18.
The report also showed an apparent violation of environmental rules, such as incorrect disposal of scrap material.
As per a Reuters report, an investigation of alleged unlawful practices at Carlsberg India also found “potential improper payments” to government officials and other regulatory lapses.
The investigation “concluded that there were internal control weaknesses … potential improper payments made to government officials/other persons and the possibility of misappropriation of company’s funds over past years by certain customers,” says the PwC document, which details the basis of the firm’s resignation.

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