Our Bureau

New Delhi, March 8

THE Union Government has initiated disciplinary action against the Vice-President, India Tourism Development Corporation's duty-free division, Mr R.C. Gupta, who has been held responsible for the acts of omission and commission in the orders placed with UDV, manufacturer of various brands of liquor, including Johnnie Walker Black Label.

In a report submitted by the division, it has been shown that ITDC's duty-free division violated the purchase manual in July 2003 when it confirmed to UDV that its `proforma invoice' would be treated as the purchase order. This was to supercede the usual process of calling for proforma invoice, checking details of prices and quantity among other things and then sending it to the high-power committee for internal concurrence if the value of the order exceeded Rs 75 lakh.

An official statement issued on Tuesday states that this change was brought about without the approval of the Chairman and Managing Director of the Finance Department and was done by the Vice-President of the Division, Mr R.C. Gupta.

The statement states that departure from the laid-down process was done only for products of UDV and adds that under this unauthorised dispensation, 42 consignments of goods were allowed to be shipped by the manufacturers without purchase order. The goods were valued at Rs 30. 82 crore.

Besides, in April 2004, a decision was taken to price Black Label at $27. But in spite of the increase, the loss suffered by ITDC on each bottle sold was 14.29 per cent. The statement adds that this loss was to be covered by the profits on other brands of whiskies sold by the duty-free shops. "But nowhere was an attempt made to try and reduce the cost price of Black Label. This led to a loss of Rs 2 crore since the largest quantity brought was of this brand," the statement adds. ITDC sold 14,000 cases of the Black Label brand last calendar year, officials said.

"It has also been reported that due to the irregular practices followed during 2001-02, the turnover of the division came down to Rs 71 crore from Rs 82 crore during the previous year. This was despite opening new shops at Bangalore, Hyderabad, Calicut and Ahmedabad and an increase in the outbound traffic from India during the period," the statement adds.

(This article was published in the Business Line print edition dated March 9, 2005)
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