AP Liquor Scam: ED Attaches Assets Worth Rs 441 Crore of Prime Accused, Others

Vijayawada: The Enforcement Directorate has attached movable and immovable properties worth Rs 441.63 crore belonging to the prime accused in the AP liquor scam case, Kasireddy Rajasekhar Reddy, his family members and others.

The attached properties were of the prime accused and related entities, as also of Booneti Chanakya and his related entities; relatives and entities of APSBCL former managing director D. Vasudeva Reddy and other persons and entities, under the provisions of Prevention of Money Laundering Act, 2002.

The attached properties were in the form of bank balances, fixed deposits, land parcels and other immovable properties.

ED initiated the investigation based on an FIR registered by the AP state CID on the complaint of principal secretary to the state government, citing a loss of `4,000 crore to the state exchequer.

The investigation found that after the change of government in 2019, the YSRC government monopolised retail liquor outlets. “The automated system was deliberately disabled and replaced with a manual system, thereby giving unfettered discretionary power to APSBCL officials for issuance of Orders for Supply.”

The manual OFS regime, the ED said, was misused to discriminate against established liquor brands. Preferential and irregular allocations were extended to select ‘favoured’ brands on receipt of kickbacks.

The liquor syndicate promoted the introduction of ‘similar-sounding brands’ with artificially inflated basic prices. The distilleries were coerced into paying illegal kickbacks ranging from 15 to 20 per cent of the basic price per case as a precondition for receiving OFS approvals.

The investigation revealed the prime accused Kasireddy Rajasekhar Reddy, along with other members of the liquor syndicate, orchestrated a multi-crore scam in liquor procurement and distribution system.

“The scam primarily involved control and manipulation of the procurement process of APSBCL, leading to an estimated wrongful loss of Rs 3,500 crore. The proceeds of the crime were laundered and distributed among the members of the syndicate for their personal enrichment,” it is stated.

The prime accused in collusion with Booneti Chanakya, Muppidi Avinash Reddy, Tukekukla Eswar Kiran Kumar Reddy, Paila Dileep, Saif Ahmad and others collected kickbacks of Rs 3,500 crore. “The accused established control over several distilleries which were utilised as Special Purpose Vehicles for generation of proceeds of crime.”

Manipulation of liquor transportation contracts awarded through tender floated by the APSBCL turned out to be a source for illicit revenue generation.

The investigation found that several distillers engaged vendors and fictitious entities for purported supply of raw materials and packaging items. These vendors facilitated conversion of banking funds into unaccounted cash through inflated and fictitious invoicing for goods that were never actually supplied, it was stated.

“Through manipulation of procurement and supply mechanisms, the syndicate generated illegal revenues worth `100 crore per month, resulting in wrongful personal enrichment while causing loss to the state exchequer.”

The cash kickbacks were collected and stored at multiple locations in Hyderabad, from where they were subsequently moved and distributed to the designated cash handlers of the syndicate.

The investigation agency said it noticed a money trial of `1,048.45 crore in the form of kickbacks which several distilleries were compelled to pay in the form of cash, gold, as well as in the form of control and operation of some distilleries by the syndicate, and also in the form of financial gains derived from transport of liquor.