ED attaches ₹441.6 crore assets in Andhra Pradesh liquor scam probe
HYDERABAD: The Directorate of Enforcement (ED) has attached movable and immovable properties worth ₹441.63 crore in connection with the alleged Andhra Pradesh liquor scam under the Prevention of Money Laundering Act (PMLA), 2002.
The attached assets belong to Kessireddy Rajasekhara Reddy, his family members and related entities; Booneti Chanakya and associated firms; relatives and entities linked to Donthireddy Vasudeva Reddy; and several other individuals and companies. The properties include bank balances, fixed deposits, land parcels and other immovable assets.
The ED began its investigation based on a First Information Report (FIR) registered by the Andhra Pradesh Crime Investigation Department (CID) under Sections 120-B, 409 and 420 of the Indian Penal Code (IPC), 1860. The FIR followed a complaint by the principal secretary to the Andhra Pradesh government alleging a loss of about ₹4,000 crore to the state exchequer.
Liquor policy changes and procurement manipulation
According to the ED, liquor trade in Andhra Pradesh before 2019 operated through an automated software system that digitally tracked procurement, supply and sales. The agency said this system ensured transparency and maintained an electronic audit trail.
After the 2019 Assembly elections, the newly formed state government allegedly monopolised retail liquor sales through Government Retail Outlets run by the Andhra Pradesh State Beverages Corporation Limited (APSBCL).
Investigators alleged that the automated system was deliberately disabled and replaced with a manual process, giving APSBCL officials discretionary powers in issuing Orders for Supply (OFS).
The ED said this system was used to sideline established liquor brands while granting preferential supply orders to select “favoured” brands in exchange for kickbacks.
Kickbacks and role of liquor syndicate
The investigation found that distilleries were allegedly forced to pay illegal kickbacks ranging from 15% to 20% of the basic price per liquor case to obtain OFS approvals. Manufacturers who refused to comply allegedly faced delayed payments or rejection of supply orders.
The agency said communications related to kickback demands were conducted through encrypted Voice over Internet Protocol (VOIP) calls and applications such as Signal to conceal the identities of key operatives.
Among those identified in the alleged network were Booneti Chanakya (alias Prakash), Muppidi Avinash (alias Sumeeth) and Mohammed Saif.
According to the ED, Kessireddy Rajasekhara Reddy and other members of the alleged syndicate manipulated APSBCL’s procurement process, causing an estimated wrongful loss of ₹3,500 crore to the state exchequer.
Investigators said the group allegedly collected kickbacks worth about ₹3,500 crore with the involvement of several individuals, including Muppidi Avinash Reddy, Tukekula Eswar Kiran Kumar Reddy, Paila Dileep and Saif Ahmad.
Money laundering through firms and real estate
The ED said the syndicate allegedly controlled distilleries such as Adan Distillery Pvt Ltd, Leela Distilleries Pvt Ltd and U.V. Distilleries to generate proceeds of crime.
The probe also examined a centralised liquor transportation contract awarded by APSBCL to Sigma Supply Chain Solutions Pvt Ltd at rates higher than earlier depot wise transport costs. Investigators said operational control of the contract allegedly rested with members of the syndicate.
Funds from the contract were allegedly diverted to firms including TEKKR, Arroyo and Ezyload and routed through multiple transactions to conceal the source of money.
Investigators also found that several distilleries allegedly used fictitious vendors for supply of raw materials and packaging materials. The ED said inflated or fake invoices were used to convert banking funds into unaccounted cash.
The agency said the proceeds of crime were invested in real estate and other assets through firms including Eshanvi Infra Projects Pvt Ltd, ED Entertainment, Uni Corporate Solutions Pvt Ltd and Tag Developers.
According to the ED, shell entities such as Olwick, Kripati, Nysna Multiventures, Arroyo, Ezyload and D-Cart were used to layer funds through complex transactions without legitimate business purposes.
₹100 crore illegal revenue every month
The ED alleged that the syndicate generated illegal revenue of around ₹100 crore per month by manipulating liquor procurement and supply mechanisms.
Cash kickbacks were allegedly stored at several locations in Hyderabad before being distributed or moved by designated handlers.
So far, investigators have traced a money trail of ₹1,048.45 crore in kickbacks paid by distilleries in cash, gold and other forms.
The ED said the proceeds were used for purchase of immovable properties and personal enrichment of syndicate members and associates. A substantial portion of the funds was allegedly concealed or dissipated.
Further investigation is under progress.
