The case came to light after the TDP came to power in 2024. The Special Investigation Team described it as involving conspiracy, breach of trust, corruption, and money laundering.
Published May 08, 2025 | 10:37 PM ⚊ Updated May 08, 2025 | 10:37 PM
Raj Kasireddy detained in connection with Andhra Pradesh liquor scam.
Synopsis: The Enforcement Directorate has launched a money laundering investigation into an alleged ₹3,200 crore liquor scam in Andhra Pradesh linked to the previous YSRCP government. A Special Investigation Team constituted by the TDP government has alleged that liquor policies were manipulated to benefit select distilleries, sidelining major brands and enabling large-scale kickbacks.
The Enforcement Directorate (ED) has launched an investigation into the alleged ₹3,200 crore liquor scam in Andhra Pradesh, which reportedly took place during the Yuvajana Sramika Rythu Congress Party (YSRCP) government.
A Special Investigation Team (SIT), formed constituted by the Telugu Desam Party (TDP)-led National Democratic Alliance (NDA) government, has alleged large-scale manipulation in liquor procurement policies that significantly reduced the market share of major companies like United Spirits and Pernod Ricard – from 53.21 percent in 2018–19 to just 5.25 percent by 2023–24.
The SIT alleged select distilleries disproportionately benefited from these changes.
Its findings were detailed in a remand report submitted to the Vijayawada Special Court for SPE and ACB on 22 April, during the production of Kesireddy Rajasekhar Reddy, former Information Technology Adviser to the YSRCP government and the prime accused in the case.
The ED, in a letter to Vijayawada Police Commissioner SV Rajasekhar Babu – who also heads the SIT – stated it would probe the case under the Prevention of Money Laundering Act, 2002 (PMLA).
The agency requested a certified copy of the First Information Report (FIR No. 21/2024, dated 23 September 2024), bank account and asset details of the accused, remand reports, and information on arrests made so far.
The case came to light after the TDP came to power in 2024. The Special Investigation Team described it as involving conspiracy, breach of trust, corruption, and money laundering.
It was initiated following a complaint filed on 20 September 2024 by Principal Secretary Mukesh Kumar Meena, based on findings from the “Report on Liquor Procurement and Market Manipulation (2019–2024)” prepared by a five-member Andhra Pradesh State Beverages Corporation Limited (APSBCL) committee.
The case was formally registered on 23 September 2024 under Indian Penal Code (IPC) Sections 409, 420, 120(B), 34, and 37, as well as Sections 7, 7A, 8, 13(1)(b), and 13(2) of the Prevention of Corruption Act, 1988. The initial investigation, led by T Daiva Prasad, was later handed over to R Sri Hari Babu.
The SIT in its remand report, said the scam involved kickbacks paid by beneficiaries of the liquor policy through a network of senior officials and political leaders.
The Andhra Pradesh State Beverages Corporation Limited (APSBCL) Committee’s report, submitted to the SIT, alleged that automation in liquor sales was deliberately disabled to favour select distilleries and suppress established brands.
Funds were allegedly laundered via shell companies, with public health compromised in the process.
The report stated that brands such as Bagpiper Premier Whisky, McDowell’s No. 1, and Seagram’s Royal Stag were deliberately sidelined.
Stock available in depots was not supplied to Government Retail Outlets (GROs), leading to expiry and supplier losses.
Meanwhile, new brands including Adan’s Supreme Blend Superior Grain Whisky, Andhra, and Leela’s Brilliant Blend were allegedly allocated orders far beyond the permitted 10,000-case limit.
These allocations, the report said, violated e-procurement norms and Rate Contract Agreements, giving undue market advantage to certain suppliers.
The transparent, automated Order for Supply (OFS) system – based on sales and stock data – was reportedly replaced with a manual process from 2019, enabling manipulation by officials.
The APSBCL committee further alleged that the conspiracy was organised by a syndicate involving senior officials, political leaders, and private players, with Kesireddy Rajasekhar Reddy as a central figure.
Others named included:
The plan was reportedly discussed in meetings in Hyderabad and Vijayawada, including one at Vijaya Sai Reddy’s residence on 13 October 2019 and another in Jubilee Hills in December that year.
The meetings allegedly projected monthly kickbacks of ₹50–60 crore.
C-Tel software, which ensured transparency in liquor procurement, was reportedly disabled on 15 October 2019 following instructions from Vasudeva Reddy, despite objections from the software provider.
Kickbacks were allegedly fixed per case based on liquor prices – ₹150 for lower-end brands and up to ₹600 for premium ones.
Collections occurred every five days through associates using secure communication tools, including virtual private networks (VPNs), international numbers, and the Signal app.
The SIT reported that Satya Prasad held daily WhatsApp calls with depot managers, relaying indent plans prepared by Kesireddy.
Managers were allegedly pressured to use GRO credentials to generate supply indents based on kickbacks, ignoring actual demand.
Funds were reportedly laundered via shell firms, hawala networks, inflated invoices, and fake marketing spends.
Kesireddy is accused of managing SPY Agro Industries’ accounts, using them to divert money into shell companies and invest in ventures like Eshnavi Infra.
A remand report also alleged a flawed discount policy introduced by Vasudeva Reddy, which applied a flat 1.5 percent supplier discount regardless of payment timelines – resulting in an estimated ₹200 crore overpayment between June 2022 and March 2024.
Kesireddy Rajasekhar Reddy was arrested on 22 April at Rajiv Gandhi International Airport, Hyderabad.
His confession, recorded in the presence of mediators, reportedly admitted to orchestrating the kickback network and influencing policy decisions. His mobile phone and SIM card were seized.
As Information Technology Adviser, Kesireddy allegedly controlled OFS issuance based on bribes, coordinated collections through associates, and used information provided by a data entry operator named Anusha.
He is also accused of investing proceeds into Adan Distillery and Leela brands.
According to the remand report, he claimed to have operated with the endorsement of then Chief Minister YS Jagan Mohan Reddy to generate funds for the party – but refused to sign the confessional statement.
(Edited by Dese Gowda)
