Nestle India under revenue investigation

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NEW DELHI -- Nestle India, a 51% subsidiary of the Swiss foods giant, is under investigation by India's Directorate of Revenue Intelligence for allegedly diverting coffee exports meant for Russia to the U.S and Europe.

Though the New Delhi-based arm confirms the investigation, it denies shipping coffee for Russia to other markets. The government suspects the $281m Nestle India has illegally opened bank accounts overseas for depositing amounts received from the diverted coffee shipments, thus violating the local customs and foreign exchange regulations.

Nestle is the fourth big marketer being investigated by the centre-left United Front government after B.A.T Industries' 31.7%-held cigarette arm ITC, liquor company Shaw Wallace & Co. and Premier Automobiles, maker of Fiat and Peugeot models in India.

Copyright December 1996, Crain Communications Inc.

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