Hyderabad, March 6: The Enforcement Directorate (ED) has taken significant action in the investigation of the high-profile liquor scam in Andhra Pradesh by temporarily attaching assets worth ₹441.63 crore. This action is part of a money laundering case under the Prevention of Money Laundering Act (PMLA).
The attached assets include bank balances, fixed deposits, land plots, and other immovable properties belonging to key individuals and entities involved in the case, including Keshireddy Rajasekhar Reddy, his family members, and associated companies, as well as Bhuneti Chanakya and his related entities, and relatives of Donthireddy Vasudev Reddy.
The investigation began following a complaint from the Principal Secretary of the Andhra Pradesh government. Subsequently, the Crime Investigation Department (CID) of Andhra Pradesh registered an FIR under various sections of the Indian Penal Code, alleging that a major scam linked to the liquor trade resulted in a loss of nearly ₹4,000 crore to the state exchequer. The ED initiated its inquiry based on this FIR, focusing on the money laundering aspect.
The investigation revealed that prior to 2019, the liquor trade in Andhra Pradesh was regulated 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 following the 2019 assembly elections, the state established complete control over retail liquor sales through government-operated outlets managed by the Andhra Pradesh State Beverage Corporation Limited (APSBCL).
According to the ED’s findings, this led to a criminal conspiracy to dismantle the old automated system and replace it with a manual one, granting APSBCL officials nearly unrestricted authority to issue 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 special benefits and larger supply orders in exchange for bribes.
The inquiry further uncovered that the liquor syndicate promoted the introduction of ‘look-alike brands’ into the market, artificially inflating their base prices to generate extra profits for distillery companies. Allegedly, these additional funds were used for bribery, with distillery companies coerced into providing illegal kickbacks of approximately 15 to 20 percent of the base price for each case to secure supply orders.
Manufacturers who refused to pay these bribes faced various pressures, including the cancellation of supply orders and withholding of payments. To conceal bribery discussions, encrypted internet calls and secure messaging applications were reportedly used to keep the identities and roles of key individuals secret.
The ED claims that Keshireddy Rajasekhar Reddy, along with other accomplices, manipulated the liquor procurement and distribution system on a large scale, resulting in an estimated loss of around ₹3,500 crore to the government treasury. During this period, approximately ₹3,500 crore in bribes were allegedly collected, which were later distributed for personal gain.
The investigation also revealed that certain distillery companies were brought directly or indirectly under the control of the syndicate, including companies like Adan 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 uncovered manipulations in contracts related to liquor transportation. The agency stated that APSBCL awarded a centralized transportation tender to Sigma Supply Chain Solutions Private Limited at significantly higher rates than before. Although the contract was in this company’s name, it was allegedly controlled by individuals linked to the liquor syndicate.
The inquiry also found that a network of shell companies and fake firms was created to conceal the money earned from the scam. These companies attempted to hide the true origin of the funds by transferring money in multiple stages, and the funds were also used to purchase real estate projects and personal properties.
According to the ED, approximately ₹1,048.45 crore of the money trail has been traced so far. The agency has stated that the investigation is ongoing, and further actions cannot be ruled out in the future.