Published Feb 22, 2026 | 3:31 PM ⚊ Updated Feb 22, 2026 | 3:31 PM
Representational image. Credit: iStock
Synopsis: Former APSBCL MD Donthireddy Vasudeva Reddy was arrested in Vijayawada over the alleged ₹3,500-crore liquor scam after his bail plea was rejected. Named Accused No. 2, he faces charges of running a syndicate manipulating liquor procurement, sales, and kickbacks during the YSRCP regime.
In a major development in the alleged ₹3,500-crore liquor scam in Andhra Pradesh, the SIT has arrested former Managing Director of Andhra Pradesh State Beverages Corporation Limited, Donthireddy Vasudeva Reddy.
Reddy, named as Accused No. 2 (A2), was taken into custody on Saturday, 21 February, after the Vijayawada Anti-Corruption Bureau (ACB) court rejected his anticipatory bail plea. His petition is still pending before the Andhra Pradesh High Court.
The arrest followed hours of questioning. According to SIT officials, Reddy did not share crucial information during the interrogation. By afternoon, the SIT formally announced his arrest. Two mobile phones were seized from his possession. Investigators described him as a key conspirator in the alleged scam.
The case pertains to alleged large-scale irregularities in liquor procurement and sales between 2019 and 2024, during the tenure of the YS Jagan Mohan Reddy-led YSRCP government.
Reddy was apprehended in Vijayawada and produced before the ACB Special Court the same day. After examining the remand report, the court sent him to judicial custody till 27 February. He was later shifted to Guntur District Jail.
During the hearing, Reddy’s counsel argued that he had cooperated with investigators and was even willing to turn approver. The defence said there was no need for arrest, especially with his anticipatory bail plea pending before the High Court. But the court was not convinced. Citing the seriousness of the charges and the need for further probe, it rejected the arguments.
As former MD of APSBCL and Commissioner of Distilleries and Beverages during the YSRCP regime, Reddy is accused of heading a well-oiled syndicate involving officials and private players.
The officials claim the online liquor sales and Order for Supply (OFS) system was deliberately switched to manual mode. This allegedly opened the floodgates for manipulation. Orders were altered, brand allocations, tweaked and stock movements changed at will.
Liquor company owners were allegedly pressured to pay hefty kickbacks. Commissions reportedly ran up to ₹60 crore/month. Some brands were pushed while others were pushed out. The playing field, officials said, was anything but level.
The remand report cites technical evidence, Forensic Science Laboratory findings and witness statements. Reddy is described as a co-conspirator alongside prime accused Kasireddy Rajasekhar Reddy (A1).
The roots of the scandal lie in the 2019 excise policy shift. After coming to power, YSRCP took control of liquor retail, placing APSBCL in charge of procurement and distribution. The stated aim was to curb private profiteering and regulate sales.
However, investigators now claim that the system became a breeding ground for corruption. Syndicates allegedly took control of the supply chain. Premium brands were black-marketed. Unauthorised distilleries and illegal filling points are said to have flourished. Depot operations were allegedly manipulated.
According to sources, the more arrests could follow as the SIT continues to peel back the layers of what is being dubbed as one of the biggest excise scandals in the State’s history.
