MUMBAI: Carlsberg is investigating its Indian unit for financial irregularities, including incorrect payments, embezzlement and kickbacks from customers. The company said the probe followed accusations made by its local partner, with which it’s “engaged in a very difficult commercial conflict”.The maker of Tuborg beer has launched an internal audit of all processes related to permits and licences, and has reopened previously closed investigations, regulatory filings show. The audit is being conducted under the supervision of Carlsberg Group’s global integrity committee.Carlsberg said conflict with the JV partner was at the heart of the matter. It entered India in 2006 by incorporating South Asia Breweries , a JV with Nepal-based Khetan Group “We have, for some time, been engaged in a very difficult commercial conflict with our Indian JV partner about the repayment of a $43 million loan he owes us and his wish to sell his stake in the business early at an unreasonably high price,” Steve JH Deng, corporate affairs director, Carlsberg Asia, told ET.“As the commercial conflict intensifies, our partner and his representatives on the Carlsberg India board have decided to circumvent appropriate governance structures and share a series of wide-ranging accusations at all possible opportunities, including in the Carlsberg India annual report,” said Deng.Three board members of Carlsberg’s Indian unit voted not to approve the latest accounts, citing lack of clarity on these matters.Carlsberg said it has sought advice from external law firms, informed several Indian states about its approach, and in some instances, adjusted its practices accordingly, as well as tightened internal processes. “The issues mentioned in the report are of very different nature and background, ranging from disagreements on interpretation of local legislation to more serious compliance matters which we investigate thoroughly and which our partner is well aware of,” Deng said. “Unfortunately, investigations are being further complicated by the fact that our partner’s representatives are refusing to cooperate with the investigators.”The current internal inquiry is the second in as many years. About two years ago, a former employee had alleged that executives at Carlsberg’s Indian unit had offered bribes to government officials in Hyderabad in 2015-16.The employee, who claimed wrongful dismissal, had however refused to hand over all the evidence unless he was paid. The matter was later investigated by a committee that included a former Delhi court judge, an external law firm and a chartered accountancy firm, which found the allegations to be unsubstantiated. “Despite being a private entity, Carlsberg should look into appointing independent directors and implement a mechanism that leads to greater accountability and transparency,” said Mohit Yadav, founder of Veratech Intelligence.The company said in its financial statement that it had received communications alleging potentially unlawful and unethical practices by some employees. “The matters include allegations of promoting sale of company products in prohibited areas, potential improper payments, kickbacks from its customers and misappropriation of sales promotion schemes payments, etc,” said Carlsberg India in its latest regulatory filing, which was sourced from Veratech. The review will be concluded in the first quarter of 2020.Carlsberg has a 19% share of India’s beer market and is the world’s third-largest brewer after United Breweries and ABInBev.Two years ago, the Competition Commission of India had launched a probe into whether the three companies, which collectively control more than 90% of India’s beer segment, were guilty of price cartelisation.