Magunta Raghava, who was produced before the Rouse Avenue Court on Saturday, was remanded in 10 days ED custody.
Magunta Raghava Reddy.
The Enforcement Directorate (ED), in its remand application filed in the Rouse Avenue Court on Saturday, 11 February, said that YSRCP MP Magunta Srinivasula Reddy’s son, Maguna Raghava Reddy, conspired with others in the formation of a cartel of manufacturers, wholesalers, and retailers in the infamous Delhi liquor scam.
The court granted 10 days of custody of Raghava Reddy to the ED.
The ED, in its remand application before the court, said that Magunta Raghava was the key person in the conspiracy involving cartelisation and kickbacks, along with various other persons, in the Delhi liquor scam that involved manipulating the state’s Excise Policy of 2021-22.
Magunta Raghava is the owner of liquor manufacturing units in the name of Enrica Enterprises Pvt Ltd located in Chennai, the ED said.
He further controlled two retail zones in the name of Magunta Agro Farms Pvt Ltd directly in contravention of the Excise Policy of 2021-22, where a manufacturer was not permitted to hold either retail or wholesale operations.
Raghava, through a proxy, Prem Rahul Manduri, also held 32.5 percent stake in IndoSpirits of another accused, Sameer Mahendru, which held an L1 wholesale license, the ED has contended.
Raghava, being part of the so-called “South Group”, was part beneficiary of the conspiracy in which this group paid ₹100 crore approximately to the Aam Aadmi Party (AAP) which is in power in Delhi.
The ED has said that Raghava Magunta owned two retail zones in the name of Magunta Agro Farms Pvt Ltd — which, on paper, is owned by N Lakshmi Narayan Reddy, Venubabu Yallaturi, and Ramakrishna Reddy Mannemala.
However, according to the ED, these persons are merely dummies/proxies as the effective control of this business was with Raghava Magunta.
The ED also said that Raghava was involved in extending his cartel by cross-funding the EMD, or earnest money deposit, with other retailers. This was apparently done through Zainab Trading, an entity owned by Raghava Magunta which has been hidden behind multiple layers of entities.
The ED found this when it was analysing the RoC documents of the subsidiary and holding companies of Raghava Magunta.
The majority shareholding of Zainab Trading is with Revanth Real Estate Private Limited (99.99 percent), which is a subsidiary of Pegasus Enterprises Pvt Ltd, whose 25 percent of shares were owned by Raghava Magunta and the remaining 75 percent by Diadem Enterprise Pvt Ltd.
The majority of shareholding of Diadem Enterprise Pvt Ltd is with Viking Enterprises Pvt Ltd (99.99 percent), which in turn is owned by Raghava Magunta, who owns 99 percent shares in it.
According to the ED, Zainab Trading provided ₹15 crore towards the EMD payment of Khao Gali Restaurants Pvt Ltd of a co-conspirator and accused in the Delhi liquor scam, Sameer Mahendru, and received ₹25 crore from Bubbly Beverages, an entity of Sameer Mahendru towards the EMD payment of Magunta Agro Farms Pvt Ltd.
This was done with the intention to gain control of maximum retail zones and having stakes in them.
Raghava, according to the ED, further extended this conspiracy of cartelisation by forming a partnership for wholesale operations under Mahendru’s IndoSpirits.
Raghava, in connivance with co-conspirator and accused Mahendru and other members of the “South Group”, formed the partnership firm IndoSpirits to undertake wholesale operations wherein he controlled 32.5 percent stake.
To hide his true ownership in this firm, Raghava used a proxy, Prem Rahul Manduri, to represent his interests in this firm, the ED has contended.
Prem Rahul Manduri, in his statement to the ED last October, revealed that he was a dummy for Raghava in IndoSpirits.
He also told the ED that all decisions with respect to this share were taken by Raghava and that he had no role. Further, he said he had never even met Sameer Mahendru.
The ED has said that Raghava Magunta, through his father and Ongole MP Magunta Srinivasulu Reddy, who is popularly called MSR, got the partnership in IndoSpirits.
Srinivasulu Reddy, whose properties were raided last year, has consistently denied he has any role in the Delhi liquor scam.
However, according to the ED, Sameer Mahendru, in his statements, revealed that Prem Rahul Manduri was representing the interests of MSR in IndoSpirits.
Another accused, Arun Pillai, in his statement had revealed that a meeting was called by Magunta Srinivasalu Reddy which was attended, apart from Pillai himself, by Raghava Magunta, Nagaraja Reddy, a close associate of MSR who handles all his liquor trade in South India and West Bengal, and auditor Butchibabu Gorantla.
In this meeting, according to ED, MSR said he was keen on doing trade in liquor under Delhi’s new excise policy and that Raghava would handle all operations there.
According to the ED, MSR said he had met Delhi Chief Minister Arvind Kejriwal to find out more about the new excise policy.
The new Excise Policy of 2021-22 was brought out with an extraordinarily high 12 percent profit margin for wholesalers and almost 185 percent profit margin for retailers. Under the plot hatched, according to the ED, half of the 12 percent margin was to be retrieved from the wholesalers as kickback and paid to AAP leaders.
The “South Group”, however, paid a kickback to the tune of ₹100 crore in advance to Vijay Nair, who was managing this scheme and conspiracy on behalf of the leaders of the AAP, the ED has said.
In lieu of this advance kickback payment, Vijay Nair ensured that the “South Group” secured stakes in wholesale businesses as they had no hold or base in the Delhi liquor business.
He ensured that they were allowed to hold multiple retail licenses over and above what was permissible under the Excise Policy and that they were given other undue favours, the ED has contended.
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