CBI registers corruption case against Mondelez India and its former brass

First information report named 13 accused including Mondelez's former brass and ex-government officials

The Central Bureau of Investigation (CBI) has charged Mondelez India, erstwhile Cadbury India and its former brass along with ex-officials of customs and excise department for criminal conspiracy and corruption, for allegedly bribing government officials to obtain licence and approvals for chocolate factory at Baddi in Himachal Pradesh in 2010. 

“An enquiry was conducted by the state capital Shimla branch on the allegations that the Mondelez Foods have paid bribes, misrepresented the facts and manipulated the records to fraudulently avail excise duty and even income-tax benefits,” said CBI in its first information report. 

For availing the same, executives, members of board collectively decided to manipulate records and engage intermediaries to route bribes and also cover-up all those evidences the had surfaced during the internal investigation, it noted.

The company had been doing commercial production since 2005 of its malt-based food ( Bournvita) from the same area which is otherwise prohibited for the commercial use. After two years, in 2007, it also had expanded  its production by creating a units for 5-star and Gems ( confectionaries) on the land acquired to avail tax holiday for additional 10 years. 

Enquiry also found that instead of setting up a separate unit, it expanded its production in the existing units to avail the duty benefits. Typically tax holidays and duty benefits allowed for a new manufacturing units in such locations. The findings in the matter indicate that Cadbury did not fulfil the conditions for tax holiday and hence was not entitled for the exemption, CBI noted. 

Further, it said that Cadbury criminally conspired with the Sumit Sharma ( tax consultant) was engaged for liasoning with central excise officers. 

CBI also cited the enquiry by the Directorate General of Central Excise (DGCEI) initiated in 2011 in the matter, where it rejected the food company tax claim and imposed a penalty of about Rs 240 crore for wrongfully claiming the excise benefit. 

Confectionary makers has been in trouble for last one decade. Apart from anti-corruption agency, the company has been also under radar of state government’s local agency and India’s central vigilance commission.

In 2017, US markets regulator Securities and Exchange Commission  had also charged the company with poor internal controls and violation of anti corruption laws. CBI learnt to have also assisted the regulator in the said matter.