Ahead of the Enforcement Directorate’s (ED) scheduled questioning of BRS MLC K Kavitha in New Delhi in connection with the Delhi liquor scam, Hyderabad-based businessman Arun Ramachandra Pillai filed a petition in the Rouse Avenue Court on Friday, 10 March, seeking to withdraw the statement he gave to the investigative agency claiming that he was Kavitha’s front.
The development is significant as the ED is understood to have given notices to Kavitha to appear before it on Saturday, based on the confession by Arun Pillai.
It is not yet known why Arun Pillai did a volte-face, but his action will certainly impact the line of questioning the ED intends for Kavitha, daughter of Telangana Chief Minister K Chandrashekar Rao.
Arun Pillai said he wanted to take back the petition in which he had stated that he was a proxy for Kavitha in the company IndoSpirits of another accused Sameer Mahendru.
The court then issued a notice to the ED. Pillai is in ED custody till 13 March.
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ED on Arun Pillai and South Group
The ED, in its remand report of Arun Pillai, said the probe with respect to his role has revealed that he was one of the key persons of entire Delhi liquor scam, involving payments of huge kickbacks to the tune of ₹100 crore and formation of the biggest cartel of the so-called “South Group”.
The South Group is said to comprise Sarath Chandra Reddy of Aurobindo Pharma, YSRCP Ongole MP Magunta Srinivasulu Reddy, his son Magunta Raghava, Kavitha herself, and others.
The South Group, according to the ED, was being represented by Pillai, another Hyderabad businessman Abhishek Boinpalli, and Butchibabu Gorantla, a former CA of Kavitha’s.
Pillai along with his associates was coordinating with various persons to execute the political understanding between the South Group and the leaders of the Aam Aadmi Party (AAP), the ED has said.
The AAP leaders, according to the ED, had tailored the Delhi excise policy of 2020-21 to benefit the South Group.
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Detailing Pillai’s role
According to the ED, Pillai was involved in the kickbacks from the South Group and the recoupment of the same from businesses in Delhi.
Pillai is a 32.5 percent partner in IndoSpirits, which had got an L1 license. IndoSpirits is a partnership firm of Pillai, Prem Rahul (32.5 percent) and IndoSpirits Distribution Limited (35 percent) wherein, the ED said, Pillai and Rahul represented the benami investments of Kavitha, Srinivasulu Reddy and his son Raghava.
Pillai, along with his associates, Abhishek Boinpalli and Butchibabu, orchestrated the whole scheme of forming a cartel of the manufacturers, wholesalers and retailers which controlled more than 30 percent of the whole liquor business in Delhi.
According to the ED, Pillai was instrumental in the formation of this cartel that controlled total of nine retail zones: Magunta Agro Farms Pvt Ltd (which was awarded two retail zonal licenses, Zone 4 and 23) owned by Raghav Magunta; Trident Chemphar Limited (Zone 21 and 24); Organomix Ecosystems (Zone 31); Sri Avantika Contractors (Zone 18 and 26), and Khao Gali Restaurants Pvt Ltd (Zone 2 and 3).
This cartel was created with intent of forming a seamless mechanism to recoup/recover the kickbacks already paid by the South Group in the garb of business operations.
‘Pre-dictated statements’
The petition by Arun Pillai seeking to recant his statement to the ED is not the only time the accused in the case to have suggested coercion by the investigative agency.
Reddy made the allegation during the arguments on his bail application before Special Judge MK Nagpal, and claimed the accusation of ₹100 crore bribe having been paid to Delhi government officials was “baseless”, and that there was no evidence regarding the generation of that amount.
