ED investigates Philip Morris International and Godfrey Philips on violation of Country’s laws charge

Date:

Trending

The Enforcement Directorate (ED) is investigating Philip Morris International Inc and its Indian partner Godfrey Phillips for alleged violation of the country’s laws, a senior directorate source told Reuters on Friday.

- Advertisement -

The Enforcement Directorate has been looking into both the companies and the scope of the investigation is much broader than the alleged foreign investment law violations highlighted in a Reuters story published on Wednesday, the source said.

Philip Morris has for years paid manufacturing costs to Godfrey Phillips to make its Marlboro cigarettes, circumventing a nine-year-old government ban on foreign direct investment in the industry, Reuters reported based on a review of dozens of internal company documents, which were dated between May 2009 and January 2018.

- Advertisement -

Three former officials and one former head of the Enforcement Directorate had reviewed the Philip Morris documents for Reuters and said the dealings should be investigated for circumventing India’s foreign direct investment rules.

On Friday, the Enforcement Directorate source declined to comment on whether the ongoing investigation included Reuters reporting findings, but said “this is already under investigation.”

“Both companies are being looked into,” said the source, who declined to be named citing sensitivity of the investigation.

The source declined to share further details of the probe.

A spokesman for the Enforcement Directorate did not respond to an e-mail seeking comment. Philip Morris and Godfrey did not immediately respond to requests for comment.

Philip Morris has previously told Reuters its business arrangements with Godfrey comply with India’s foreign direct investment rules. Godfrey has said all the commercial arrangements “are in complete compliance with the extant regulations governing” India’s foreign direct investment and other laws.

Shares in Godfrey briefly pared gains on Friday following the Reuters report about the investigation. They closed 2 percent higher.

MANUFACTURING CHARGES

India in 2010 prohibited foreign direct investment in cigarette manufacturing, saying this would enhance efforts to curb smoking.

Ahead of the ban, Philip Morris formed a new wholesale trading company with Godfrey. Since then, Godfrey has acted as a contract manufacturer of Marlboro cigarettes in India, while Philip Morris’s local unit acts as a wholesale trading company and promotes the brand.

Dozens of internal company documents showed Philip Morris has been indirectly paying costs related to Marlboro cigarette manufacturing in India in a phased manner.

If the Enforcement Directorate finds a company in violation of the rules, Indian law allows it to impose a penalty of up to three times the amount contravened.

THE SNAPSHOTS

Sign up to get quick snaps of everyday happening, directly in your inbox.

We don’t spam! Read our privacy policy for more info.

- Advertisement -

Support our independent journalism PayPal (Outside India) For PayU (For Indian Readers).

Krishna Mali
Krishna Mali
Founder & Group Editor of TechGraph.

More Latest Stories

More Articles

The Future of Digital Payments and Cybersecurity Challenges

The future of digital payments is evolving rapidly, driven by technological advancements, changes in consumer behavior, and the growth of e-commerce. With the rise...

How a Money Back Policy Can Be a Smart Financial Choice?

Creating financial security involves strategic planning because investment decisions form one of the essential elements. A money-back policy distributes regular payment distributions to policyholders throughout the policy term, but traditional life insurance offers payout benefits only at policy maturity. The product suits the needs...

“We Are Not America”: Canada’s New PM Mark Carney On Trump’s Comment On Making it 51st state

In his first public remarks, Canada's New Prime Minister, Mark Carney, reaffirmed Canada's independence...

US President Trump Presses NATO on Greenland Annexation Plans

During a meeting with NATO Secretary-General Mark Rutte on Thursday, US President Donald Trump...
00:01:09

VIDEO: US President Donald Trump Calls NBC A ‘Worst Network’ On Television

During a press meeting at the Oval Office on Wednesday, US President Donald Trump...

The Role of Edge Computing in AI-Powered Cloud Solutions

With businesses including artificial intelligence (AI) in their operations, cloud computing has grown in...

‘Canada Ripping Us’: US President Trump Criticizes High Tariffs on Dairy and Lumber

U.S. President Donald Trump on Friday slammed Canada’s high tariffs on American dairy and...

Trump Defends Elon Musk Plan for Federal Job Cuts; Govt Spending ‘Bloated’

Following a meeting with Elon Musk and senior cabinet members, U.S. President Donald Trump...
00:01:37

UK PM Kier Starmer Abolishes NHS England To Bring Health Services Under Govt Control

British Prime Minister Keir Starmer has announced plans to abolish NHS England and bring it back under government control. The move aims to reduce...

Trade War: Canadian PM Justin Trudeau Announces 25% Tariffs On US Imports

Ottawa: Canadian Prime Minister Justin Trudeau on Wednesday announced a 25% tariff on U.S....

RP-Sanjiv Goenka’s Firstsource Opens ANZ HQ and AI Lab in Melbourne

Firstsource Solutions Limited (NSE: FSL, BSE:532809), an RP-Sanjiv Goenka Group company, today announced the...

Choosing the Right Tax Consultant: A Guide for Businesses and Individuals

For both individuals and businesses, tax planning and compliance are crucial aspects of financial...

Meta COO Javier Olivan Offloads Shares Worth $409,768

Meta Platforms (NASDAQ: META) Chief Operating Officer Javier Olivan is set to sell 608...

Personal branding: designing logos for influencers and creators

In today’s digital landscape, personal branding has become more than just a buzzword; it’s a necessity for influencers, content creators, and public figures looking...

Demand for plumbers in Oman: which specialists are most in demand?

The demand for skilled plumbers in Oman is steadily increasing due to the country's rapid urbanisation, large-scale infrastructure projects and the ongoing development of residential, commercial and industrial properties. As the country continues to expand its cities and improve its utilities, the need for...

Meta Executive Chris Cox to Sell $13.5 Million in Shares

Meta Platforms (NASDAQ: META) Chief Product Officer Christopher Cox has filed to sell 20,000...

Logistic Startup Picckup Secures $500K in Seed Funding to Expand Electric Fleet

A Mohali-based mid-mile and last-mile logistic startup, Picckup, on Thursday, raised $500K in series...

Adani Wilmar Gets Shareholders’ Approval to Rebrand as AWL Agri Business Limited

Stock exchange-listed Adani Wilmar Limited announced on Tuesday that it has received approval from...

Pakistan Begins Rice Exports to Bangladesh Under New Government Deal

Bangladesh and Pakistan have resumed direct trade for the first time since 1971. The...

Beyond Firewalls: How Threat Intelligence Platforms Are Transforming Cybersecurity Operations

“Cybersecurity isn't just about building walls—it’s about seeing the enemy before they strike.” In...

Leveraging AI and Modern HR Solutions to Transform Recruitment Strategies for Skilled Workers

In today’s competitive job market, recruitment strategies are rapidly evolving, driven by advancements in...

Exploring Headless CMS: Key Benefits and Practical Applications for Modern Businesses

In the fast-paced digital world, content management systems (CMS) are essential for delivering cohesive...

Onlygood AI CEO Rajeev Sinha on Future of AI-Driven ESG Data and Supply Chain Transparency

Speaking to TechGraph, Rajeev Sinha, CEO & Co-founder of Onlygood.ai, shares insights on how...

INTERVIEW: ADDA’s Krishanu Mukherjee on Transforming Gated Communities

In an interview with TechGraph, Krishanu Mukherjee, AVP of Growth at ADDA.io, explained how...

Choosing the Right Tax Consultant: A Guide for Businesses and Individuals

For both individuals and businesses, tax planning and compliance are crucial aspects of financial...

Empowering Communities with Water Tech

This is a major problem worldwide; it affects billions of people in homes, villages,...

IIT Madras and SPF Partners to Enhance Policy Framework for Indian Startups

Indian Institute of Technology Madras (IIT Madras) has entered into a Memorandum of Understanding...

Ways Technology Can Help Your Business Performance

Businesses of all sizes and across every industry are integrating technology to improve their...

Microsoft Makes Equity Investment in Veeam

American tech giant Microsoft has made an equity investment in Veeam Software to develop...

Meta COO Javier Olivan Offloads Shares Worth $409,768

Meta Platforms (NASDAQ: META) Chief Operating Officer Javier Olivan is set to sell 608...

Onlygood AI CEO Rajeev Sinha on Future of AI-Driven ESG Data and Supply Chain Transparency

Speaking to TechGraph, Rajeev Sinha, CEO & Co-founder of Onlygood.ai, shares insights on how...

Vishal Puri On Spalba’s Tech-Driven Approach To Venue Booking & Planning

Speaking to TechGraph, Vishal Puri, Co-Founder of Spalba, explains how its platform uses technologies...

INTERVIEW: ADDA’s Krishanu Mukherjee on Transforming Gated Communities

In an interview with TechGraph, Krishanu Mukherjee, AVP of Growth at ADDA.io, explained how...