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Email does not arrive via distribution group but does if send directly...

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One of my external contacts with address x@y.com does receive all email addressed to him directly using the external contact entry in the address book. 

However he is with this contact entry also a member (like many other external contacts) of a distribution group (DG). 

He does not receive messages I send to the DG while all other contacts have no issue. However when I explode the users of the DG in the Outlook address field and send the same message he receives it.


When using the Exchange Admin Center I see in the delivery report of the message: 1 unsuccessful with the message: Failed: You aren't authorised to send to this recipient.


Has anybody experience with this message?

Is it a problem/setting issue on the Office 365 side or is it a message coming from the receiver side?


Thanks, Stan


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