Half Mag / Half Zine

An Indian court on Thursday sent an executive of spirits giant Pernod Ricard’s (PERP.PA) country unit and a director of local drugmaker Aurobindo Pharma Ltd (ARBN.NS) to custody for a week in a probe related to the Delhi city government’s liquor policy.

The court’s decision came hours after P. Sarath Chandra Reddy of Aurobindo Pharma and Pernod Ricard’s Benoy Babu were arrested by the Enforcement Directorate (ED), the country’s federal financial crime-fighting agency.

The ED last month raided several liquor companies, suppliers and distributors in a money-laundering investigation, according to media reports.

The investigating agency argued in court that Babu played a role in perpetuating a liquor scam and was in possession of the government’s excise policy documents much before they were made public. Babu’s lawyer countered that he did not share the document with anyone and had received them as a WhatsApp forward.

Babu is a general manager at Pernod Ricard and handles the French company’s international brands business in India, according to his LinkedIn profile.

Reddy’s arrest is not connected with the operations of Aurobindo or its subsidiaries, the company said in a separate filing earlier on Thursday.

Shares in Aurobindo, which makes a range of medicines from antibacterials to antidepressants, fell by 11.75% by close of day.

Reddy, a business administration graduate, belongs to the promoter group of the company, which has manufacturing plants in the United States, Brazil and Portugal, according to the company website.

Media reports said Reddy and Babu were arrested in connection with the ED’s investigation into the alleged irregularities in the now-scrapped liquor policy of the Delhi government.