ED attaches properties worth Rs 441 crore in Andhra liquor scam case
Hyderabad, March 6 : The Directorate of Enforcement (ED), Hyderabad, has attached movable and immovable properties worth Rs 441.63 crore belonging to Kessireddy Rajasekhara Reddy, his family members and others in connection with the Andhra Pradesh liquor scam case.
The properties belonging to Rajasekhara Reddy, his family members and related entities; Booneti Chanakya and his related entities; relatives and entities of Donthireddy Vasudeva Reddy; and other persons and entities have been attached under the provisions of the Prevention of Money Laundering Act (PMLA), 2002.
The central agency said in a statement on Friday that the attached properties are in the form of bank balances, fixed deposits, land parcels and other immovable assets.
The ED initiated the investigation based on an FIR registered by the Andhra Pradesh CID on the complaint of the Principal Secretary to the Government of Andhra Pradesh, alleging a loss to the government exchequer to the tune of Rs 4,000 crore.
The investigation has revealed that physical cash kickbacks were collected and stored at multiple locations in Hyderabad, from where they were subsequently moved, distributed or disposed of by designated cash handlers of the syndicate.
The ED investigation has so far traced a money trail of Rs 1,048.45 crore in the form of kickbacks that several distilleries were allegedly compelled to pay in cash, gold and other forms. The agency said the illegal gains were also generated through control and operation of certain distilleries by the liquor syndicate as well as through financial gains derived from liquor transportation.
The PMLA investigation revealed that the proceeds of crime were used for the purchase of immovable properties and for the personal enrichment of members of the liquor syndicate and their associates.
A substantial portion of the proceeds of crime has been found to have been concealed or dissipated by the accused persons. Further investigation is under progress, the agency said.
According to the ED, prior to 2019, the liquor trade in Andhra Pradesh was regulated through a transparent and automated software system that ensured end-to-end digital tracking of procurement, supply and sales, thereby leaving a verifiable electronic audit trail.
After the 2019 Assembly elections, the newly formed state government monopolised retail liquor outlets through Government Retail Outlets (GROs) operated by the Andhra Pradesh State Beverages Corporation Limited (APSBCL).
As part of the alleged criminal conspiracy, the automated system was deliberately disabled and replaced with a manual system, thereby vesting discretionary powers with APSBCL officials in the issuance of Orders for Supply (OFS).
The ED alleged that the manual OFS regime was misused to discriminate against established liquor brands, which were marginalised or removed from the market. At the same time, preferential and irregular allocations were allegedly granted to select “favoured” brands in exchange for kickbacks.
As part of the scheme, the syndicate allegedly promoted the introduction of “similar-sounding brands” (SSBs) with artificially inflated basic prices. This pricing manipulation enabled the distilleries manufacturing such brands to generate surplus margins, which were allegedly used to meet illegal monetary demands of the cartel.
The PMLA investigation further revealed that distilleries were allegedly coerced into paying illegal kickbacks ranging from 15 per cent to 20 per cent of the basic price per case as a precondition for receiving OFS approvals. Manufacturers who refused to comply were subjected to coercive measures, including withholding legitimate payments and rejection of supply orders.
The ED said communications relating to the demand and collection of kickbacks were carried out through encrypted VOIP calls and applications such as Signal to conceal the identities and roles of key operatives, including Booneti Chanakya (alias Prakash), Muppidi Avinash alias Sumeeth, and Mohammed Saif.
The agency said Kessireddy Rajasekhara Reddy, along with other members of the liquor syndicate, orchestrated a multi-crore scam in the liquor procurement and distribution system in Andhra Pradesh.
According to the ED, the scam involved control and manipulation of the procurement process of APSBCL, leading to an estimated wrongful loss of Rs 3,500 crore to the state exchequer.
The proceeds of crime generated from the scam were allegedly laundered and distributed among members of the syndicate for personal enrichment.
The ED alleged that Kessireddy Rajasekhara Reddy, in collusion with Booneti Chanakya, Muppidi Avinash Reddy, Tukekula Eswar Kiran Kumar Reddy, Paila Dileep, Saif Ahmad and others, collected kickbacks amounting to around Rs 3,500 crore.
The properties belonging to Rajasekhara Reddy, his family members and related entities; Booneti Chanakya and his related entities; relatives and entities of Donthireddy Vasudeva Reddy; and other persons and entities have been attached under the provisions of the Prevention of Money Laundering Act (PMLA), 2002.
The central agency said in a statement on Friday that the attached properties are in the form of bank balances, fixed deposits, land parcels and other immovable assets.
The ED initiated the investigation based on an FIR registered by the Andhra Pradesh CID on the complaint of the Principal Secretary to the Government of Andhra Pradesh, alleging a loss to the government exchequer to the tune of Rs 4,000 crore.
The investigation has revealed that physical cash kickbacks were collected and stored at multiple locations in Hyderabad, from where they were subsequently moved, distributed or disposed of by designated cash handlers of the syndicate.
The ED investigation has so far traced a money trail of Rs 1,048.45 crore in the form of kickbacks that several distilleries were allegedly compelled to pay in cash, gold and other forms. The agency said the illegal gains were also generated through control and operation of certain distilleries by the liquor syndicate as well as through financial gains derived from liquor transportation.
The PMLA investigation revealed that the proceeds of crime were used for the purchase of immovable properties and for the personal enrichment of members of the liquor syndicate and their associates.
A substantial portion of the proceeds of crime has been found to have been concealed or dissipated by the accused persons. Further investigation is under progress, the agency said.
According to the ED, prior to 2019, the liquor trade in Andhra Pradesh was regulated through a transparent and automated software system that ensured end-to-end digital tracking of procurement, supply and sales, thereby leaving a verifiable electronic audit trail.
After the 2019 Assembly elections, the newly formed state government monopolised retail liquor outlets through Government Retail Outlets (GROs) operated by the Andhra Pradesh State Beverages Corporation Limited (APSBCL).
As part of the alleged criminal conspiracy, the automated system was deliberately disabled and replaced with a manual system, thereby vesting discretionary powers with APSBCL officials in the issuance of Orders for Supply (OFS).
The ED alleged that the manual OFS regime was misused to discriminate against established liquor brands, which were marginalised or removed from the market. At the same time, preferential and irregular allocations were allegedly granted to select “favoured” brands in exchange for kickbacks.
As part of the scheme, the syndicate allegedly promoted the introduction of “similar-sounding brands” (SSBs) with artificially inflated basic prices. This pricing manipulation enabled the distilleries manufacturing such brands to generate surplus margins, which were allegedly used to meet illegal monetary demands of the cartel.
The PMLA investigation further revealed that distilleries were allegedly coerced into paying illegal kickbacks ranging from 15 per cent to 20 per cent of the basic price per case as a precondition for receiving OFS approvals. Manufacturers who refused to comply were subjected to coercive measures, including withholding legitimate payments and rejection of supply orders.
The ED said communications relating to the demand and collection of kickbacks were carried out through encrypted VOIP calls and applications such as Signal to conceal the identities and roles of key operatives, including Booneti Chanakya (alias Prakash), Muppidi Avinash alias Sumeeth, and Mohammed Saif.
The agency said Kessireddy Rajasekhara Reddy, along with other members of the liquor syndicate, orchestrated a multi-crore scam in the liquor procurement and distribution system in Andhra Pradesh.
According to the ED, the scam involved control and manipulation of the procurement process of APSBCL, leading to an estimated wrongful loss of Rs 3,500 crore to the state exchequer.
The proceeds of crime generated from the scam were allegedly laundered and distributed among members of the syndicate for personal enrichment.
The ED alleged that Kessireddy Rajasekhara Reddy, in collusion with Booneti Chanakya, Muppidi Avinash Reddy, Tukekula Eswar Kiran Kumar Reddy, Paila Dileep, Saif Ahmad and others, collected kickbacks amounting to around Rs 3,500 crore.