Som Distilleries and Breweries trades lower after company clarifies on recent reports of license suspension

Shares of Som Distilleries and Breweries were trading over 2% lower on Thursday after a media report stated that the Madhya Pradesh government has temporarily suspended the firm’s license amid allegations of child labour. Shares of the firm have lost over 8% in the last five days.

The report claimed that an inspection was conducted by the National Commission for Protection of Child Rights (NCPCR) on the basis of a complaint filed by the non-profit Bachpan Bachao Andolan (BBA) on June 15. It further cited the inspectors saying 39 boys and 20 girls were rescued from the liquor manufacturing unit.

Meanwhile, Som Distilleries and Breweries reiterated in an exchange filing on Wednesday that no action has been taken by any department. On June 17, the firm had stated in an exchange filing that “in response to media reports concerning child labour issues at our company we wish to clarify that these concerns are not related to Som Distilleries and Breweries Limited but relate to our associate Private Limited company which deals in country liquor primarily, and not the listed company as reported.”

The firm stated that labour for the associate company is supplied by contractors. “It may be the fault of the contractors who may not have got proper age verification done of the workers being allowed to work at that company. That company has extended full cooperation to the authorities regarding the issue and have terminated the services of the vendor through the directors of that company,” it had said.

Som Distilleries and Breweries further asserted that all the plants of the firm are fully compliant with all applicable laws and have all the necessary permissions.

Shares of the company have lost 0.66% since the beginning of the year. The stock has gained over 9% in the last one year.