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Banglore: First it was United Spirits Ltd’s auditor; now, the company’s board has raised red flags about its accounting.

United Spirits, which was expected to publish its fourth-quarter results on Friday after a delay of more than two months, said on Saturday it was postponing reporting results for the third time after the audit committee of the board sought “certain clarifications and information on the draft financial results and related issues."

India’s largest liquor company, which is controlled by Diageo Plc., was initially expected to publish fourth-quarter and full-year results as early as 16 May but it said on 15 May that its earnings report would be delayed due to “unavoidable circumstances." It then said on 27 May it will take more time to report its results, partly because of the accounting related to the sale of its Whyte and Mackay whisky business.

Since buying a 25.02% stake in United Spirits from the company and Vijay Mallya-owned UB Group in July last year, Diageo has been cleaning up the company’s as it tightens corporate governance practices at the firm. Last August, Diageo moved 100 UB Group executives off the payrolls of USL. These executives, who held positions at the UB Group, were being paid their salaries by the distiller.

Diageo hired the consulting firm Deloitte to vet USL’s contracts with other UB Group companies to ensure these agreements are “arm’s length transactions", Mint reported on 6 March. Deloitte, which has been working with USL on various projects, had been asked to ensure that the terms of its contracts with United Breweries Holdings Ltd (UBHL) and other UB Group firms do not give an unfair advantage to these companies.

Diageo now owns roughly 54.78% of United Spirits after it bought 26% of United Spirits shares from public shareholders for £1.11 billion (Rs11,420 crore) last month.

United Spirits shares closed down 1.07% at Rs2330.95 on Friday on the BSE.

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