According to the SEC, from at least 2006 through 2012, Beam India made improper payments to Indian government officials to obtain or retain business in the highly regulated Indian alcohol market. The SEC alleged that Beam India made payments to lower level and senior level government officials to increase government purchases for government-run retail and distribution channels, obtain better positioning of Beam’s products, and expedite label licenses and other registrations. Beam India allegedly used third parties, such as promoters who marketed the products, to facilitate the payments to government officials, and the promoters would then submit inflated or fabricated invoices to Beam India for compensation.
The SEC alleged that senior managers at Beam India, as well as certain senior management at Beam Inc., were aware of the practices, particularly after a 2010 internal investigation revealed risks of improper payments. However, the SEC claimed that Beam did not adequately address the known risks to prevent continued payments in contravention of the FCPA.