The committee pointed out that that these manipulations led to a drastic reduction in the market share of major multinational corporations (MNCs) like United Spirits and Pernod Ricard, from 53.21 percent in 2018-19 to 5.25 percent by 2023-24, while select distilleries benefited disproportionately.
Published Apr 26, 2025 | 8:30 PM ⚊ Updated May 24, 2025 | 7:39 PM
Raj Kasireddy detained in connection with Andhra Pradesh liquor scam.
Synopsis: The alleged Andhra Pradesh liquor scam during the YSRCP government (2019–24) saw ₹3,200 crore in kickbacks through a syndicate involving top officials and political leaders, probe claims. The APSBCL Committee report claimed that automation was disabled to manipulate liquor sales, sidelining major brands and promoting select distilleries. Funds were laundered via shell companies, harming public health. The case surfaced after the TDP-led government took charge in 2024.
The infamous liquor scam during the YSRCP government between 2019-24 in Andhra Pradesh is a case of alleged conspiracy, criminal breach of trust, corruption, and money laundering.
The case, registered under Crime No. 21/2024, involves violations of multiple sections of the Indian Penal Code (IPC) and the Prevention of Corruption Act, 1988.
The remand report submitted by the SIT on 22 April to the Vijayawada Special Court for SPE and ACB cases stated that the case involving Kasireddy Raja Shekhar Reddy, also known as Raj Kasireddy, led to a wrongful loss of over ₹3,200 crore to the state exchequer and distilleries, while benefiting certain individuals and select distilleries through illicit gains.
The case was registered after the advent of TDP-led NDA government in the state. It was based on a complaint lodged on 20 September, 2024, by Mukesh Kumar Meena, Principal Secretary of Andhra Pradesh, based on a report— “Report on Liquor Procurement and Market Manipulation (2019-2024)” by a five-member APSBCL committee.
According to the committee’s findings, established brands such as Bagpiper Premier Whisky, McDowell’s No. 1, and Seagram’s Royal Stag were deliberately sidelined, leading to their near disappearance from the market. Available stocks of these brands in depots were not supplied to Government Retail Outlets (GROs), causing product expiry and financial losses to suppliers.
New brands, including Adan’s Supreme Blend Superior Grain Whisky, Andhra, and Leela’s Brilliant Blend, received disproportionate Order for Supply (OFS) allocations, far exceeding the stipulated 10,000-case limit for new brands. This violated the Rate Contract Agreement and e-procurement norms, granting undue market share to select suppliers.
The transparent, computer-based OFS system, which calculated allocations using a formula based on average sales and stock levels, was replaced with a discretionary manual process post-2019. This enabled manipulation by a Special Officer, compromising process integrity.
The committee pointed out that that these manipulations led to a drastic reduction in the market share of major multinational corporations (MNCs) like United Spirits and Pernod Ricard, from 53.21 percent in 2018-19 to 5.25 percent by 2023-24, while select distilleries benefited disproportionately.
The committee further alleged that conspiracy was orchestrated by a syndicate involving high-ranking officials, political figures, and private entities, with Kasireddy Raja Shekhar Reddy, the IT Adviser to the then Chief Minister YS Jagan, identified as a central figure. Other key actors included:
The syndicate’s plan was allegedly formalised in meetings held in Hyderabad and Vijayawada, notably at Vijaya Sai Reddy’s residence on 13 October 2019, and a private building in Jubilee Hills in Hyderabad in December 2019.
These meetings allegedly estimated monthly kickbacks of ₹ 50-60 crore by manipulating liquor sales data and OFS issuance. The automated C-Tel software, which ensured transparency in procurement, was disabled on 15 October 2019, following instructions from Vasudeva Reddy, despite warnings from the software provider about adverse consequences.
The syndicate allegedly disabled the automated C-Tel platform, which integrated retail sales, stock management, and OFS issuance, and replaced it with a manual system. A private email ID (poorder4@gmail.com) was created to receive OFS requests, while the APT online platform was disrupted—breaking end-to-end integration and allowing for discretionary control over operations.
Kickbacks were allegedly fixed based on the basic price of liquor brands, ranging from ₹150 per case for cheaper brands (e.g., Andhra Gold) to ₹600 per case for premium brands (e.g., Teachers). Payments were collected every five days through associates like Prakash, using VPNs, international numbers, and apps like Signal to evade detection.
The committee further alleged that Satya Prasad conducted daily WhatsApp conference calls with depot managers, using his personal phone and laptop to share indent plans crafted by Kasireddy based on kickbacks received. Depot managers were coerced into using GRO login credentials to raise kickback-driven indents, bypassing market demand.
Illicit funds were allegedly laundered through shell companies, hawala networks, inflated vendor payments, and fake promotional expenses. Kasireddy allegedly controlled SPY Agro Industries’ accounts, diverting funds to shell companies and investing in real estate ventures like Eshnavi Infra projects.
The syndicate’s actions resulted in a wrongful loss of over ₹3,200 crore. New suppliers received unlimited OFS allocations, violating the 2015 e-procurement norms, while OFS were denied to popular brands leading to market exclusion, stock expiry, and forced closures or relocations, with MNCs losing significant market share.
A lopsided discount policy, enforced by Vasudeva Reddy, applied a uniform 1.5 percent discount to suppliers regardless of payment timelines, leading to an estimated ₹200 crore overpayment between June 2022 and March 2024.
The case was registered on 23 September 2024, at CID PS, Mangalagiri, under IPC Sections 409, 420, 120(B), 34, and 37, and Sections 7, 7A, 8, 13(1)(b), and 13(2) of the Prevention of Corruption Act, 1988. The investigation, initially led by T Daiva Prasad and was later done by R Sri Hari Babu.
Kasireddy Raja Shekhar Reddy was arrested on 21 April 2025, at Rajiv Gandhi International Airport, Hyderabad. His confession, recorded in the presence of mediators, admitted to orchestrating the kickback system and manipulating liquor trade policies. A mobile phone and SIM card were seized for further investigation.
Kasireddy, as IT adviser, was pivotal in the conspiracy. He controlled OFS issuance based on kickbacks, using sales data relayed by Anusha, a Data Entry Operator. He also coordinated kickback collection through associates like Prakash and Kiran, using secure communication channels. Kasireddy managed SPY Agro Industries’ accounts, diverting funds to shell companies and investing in Adan Distillery and Leela brands.
He also collaborated with political figures to disable automation and enforce manual OFS systems, ensuring syndicate control.
He had allegedly admitted during interrogation to working under the then Chief Minister YS Jagan’s endorsement to generate revenue and party funds, though he refused to sign the confessional statement.
Forensic reports from related cases (Cr. No. 111/2022 and 112/2022) detected methyl alcohol and ethyl alcohol in liquor samples, indicating that the syndicate’s promotion of substandard brands compromised public health. Consumers, reliant on government-regulated liquor, were left with limited choices due to the suppression of trusted brands.
(Edited by Sumavarsha)
