Hyderabad, March 6: The Enforcement Directorate (ED) has taken significant action in the high-profile liquor scam investigation in Andhra Pradesh, temporarily attaching assets worth ₹441.63 crore. This action is part of a money laundering case initiated under the Prevention of Money Laundering Act (PMLA).
The attached assets include bank balances, fixed deposits, land plots, and other properties belonging to key individuals and entities involved, including Keshireddy Rajasekhar Reddy, his family members, and associated companies, as well as Buneetee Chanakya and his related organizations.
The investigation began following a complaint from the Principal Secretary of the Andhra Pradesh government, which led the Crime Investigation Department (CID) to register an FIR under various sections of the Indian Penal Code. Allegations suggest that a major scam in the liquor trade resulted in a loss of approximately ₹4,000 crore to the state treasury. The ED commenced its probe based on this FIR, focusing on the money laundering angle.
The investigation revealed that prior to 2019, the liquor trade in Andhra Pradesh was managed through a transparent and automated software system that digitally tracked the entire process of liquor purchase, supply, and sales, ensuring a clear electronic record of every transaction. However, after the formation of a new government post the 2019 assembly elections, the state imposed complete control over retail liquor sales through government-operated outlets managed by the Andhra Pradesh State Beverages Corporation Limited (APSBCL).
According to the ED’s findings, this led to the dismantling of the old automated system and the implementation of a manual system, granting APSBCL officials significant discretion in issuing liquor supply orders. The investigation also indicated that this manual system was used to discriminate against established liquor brands, with many popular brands receiving fewer orders or being pushed out of the market, while select ‘favored’ brands received preferential treatment in exchange for bribes.
The probe further uncovered that the liquor syndicate promoted the launch of ‘look-alike brands’ in the market, artificially inflating their base prices to generate additional profits for distillery companies. Allegedly, distilleries were compelled to provide illegal kickbacks of about 15 to 20 percent of the base price for securing supply orders.
Manufacturers refusing to pay bribes faced various pressures, including the cancellation of supply orders and withholding of payments. Conversations related to bribery were reportedly concealed using encrypted internet calls and secure messaging applications to keep the identities and roles of key individuals secret.
The ED claims that Keshireddy Rajasekhar Reddy, along with accomplices, manipulated the liquor procurement and distribution system on a large scale, resulting in a loss of approximately ₹3,500 crore to the government treasury. During this period, around ₹3,500 crore in bribes were allegedly received, which were later distributed for personal gain.
The investigation also revealed that certain distillery companies were brought under the control of the syndicate, including Aden Distillery Private Limited, Leela Distilleries Private Limited, and U.V. Distillery. These companies allegedly received increased commercial benefits through political and administrative influence.
Additionally, the ED’s investigation found manipulations in contracts related to liquor transportation. The APSBCL awarded a centralized transportation tender to Sigma Supply Chain Solutions Private Limited at significantly higher rates than before. Although the contract was in the company’s name, operations were reportedly controlled by individuals linked to the liquor syndicate.
To conceal the proceeds of the scam, a network of shell companies and fake firms was established, attempting to hide the true origin of the funds through multiple transfer stages. These funds were also allegedly used to purchase real estate projects and private properties.
According to the ED, approximately ₹1,048.45 crore of the money trail has been traced so far. The agency stated that the investigation is ongoing, and further actions cannot be ruled out in the future.