PwC LLP resigns as Carlsberg's India auditor

PwC LLP did not offer an opinion on Carslberg India's 2018-19 financial results, citing disagreement among board members and compliance concerns.

Resigned as the auditor, declining for the second consecutive year to give an opinion. Denmark's Carlsberg A/S is locked in a commercial dispute with its JV partner in India, Nepal-based Khetan Group, in an internal probe into local practices that sparked a boardroom battle and concerns from its auditor.

Steve Deng, corporate affairs director for Carlsberg Asia said divergent views among the Board of Directors is the primary reason for the disclaimer of opinion made by the auditor, which will be included in the 2019-20 accounts. 

He said that the auditor decided to resign. PwC's India affiliate did not offer an opinion on Carlberg India's 2018-19 results, citing disagreement among some board members and compliance concerns, including a review of complaints around the promotion of beer in prohibited areas.

Its decision to resign for the year 2019-20 was discussed at a Carlsberg India board meeting this month. The auditor's view is that if it cannot give an opinion for two consecutive years, then it has to quit. This is not public as yet.

The latest results, like last year's, have not been approved by the board's three Khetan representatives but have been signed off by the seven nominated by Carlsberg.

Khetan's representative directors had asked the Indian government to investigate Carlsberg's non-compliance with laws on trade discounts, advertisement and sales promotion, according to the brewer's India 2018-19 disclosures. 

For last year's results, PwC LLP, the local affiliate, said it chose not to give an opinion due to divergent views among board members, ongoing forensic reviews and the possible impact these could have on legal compliance.

Carlsberg's Steve Deng said official complaints that the JV partner made to India's Registrar of Companies in August 2019 and February 2020 have been closed.

The dispute comes as Carlsberg faces scrutiny by India's anti-trust authority, which has concluded the brewerer colluded with other companies to fix beer prices. A final ruling in that matter is pending.