ED calls Kavitha ‘key conspirator’ in liquor policy case on the day ‘approver’ turns TDP-BJP MP candidate

Kavitha, daughter of BRS supremo and former chief minister of Telangana K Chandrashekar Rao, was arrested in the multi-crore Delhi Excise policy scam from her Banjara Hills residence in Hyderabad on Friday, 15 March.

BRS MLC K Kavitha. (File pic/Supplied)

The ED said her custody was required to know about the people and entities involved in the alleged scam.

It said Kavitha should be interrogated under Section 50 of the PMLA to unearth the remaining proceeds of crime since she was not cooperating and had ignored summons sent to her.

PMLA Section 50 details the powers of authorities in issuing summons, producing documents, and giving evidence.

Also read: ED arrests BRS MLC Kavitha

Kavitha and the ‘South Group’

The central agency justified its request for Kavitha’s custody, saying the accused has to be confronted with voluminous materials collected during the investigation.

The ED maintained that Kavitha was linked to a “South Group” lobby that played a role in the now-scrapped Delhi excise policy for 2021-22.

It has been alleged that one of the accused, Vijay Nair, received kickbacks to the tune of at least ₹100 crore, on behalf of AAP leaders, from the “South Group”. Sarath Reddy, Kavitha, and Magunta Srinivasulu Reddy, the MP representing Ongole, Andhra Pradesh, in the Lok Sabha, his son Raghav Manguta, and others ran the “South Group”, it was alleged.

Former YSRCP MP Magunta Srinivasulu Reddy and his Raghava. (Supplied)

Following his arrest, Magunta Raghava Reddy petitioned the court to turn ‘approver’ in the case. On February 29, a Delhi court granted permission. Earlier, the court had granted Raghava bail. His father and YSRCP MP from Ongole Magunta Srinivasulu Reddy quit the party on 28 February, one day before the Delhi court allowed his son to turn approver.

On Saturday, one day after ED arrested Kavitha in the Delhi liquor policy case, the father-son duo joined TDP, an alliance partner of BJP and Jana Sena in Andhra Pradesh.

Also Read: BRS MLC Kavitha sent to 7-day ED custody in Delhi liquor policy case

‘Kavitha destroyed evidence’

The ED elaborated that Kavitha had destroyed evidence. It said she had deleted evidence and contents from her mobile phone (8***6-6***6).

The investigation agency said she had produced a phone for examination on 3 March 2023, which had no data. However, Kavitha claimed that she had used FaceTime and WhatsApp on the device. When confronted, she gave evasive answers, the ED said.

The remand report also stated that nine phones submitted on 21 March 2023 were already formatted and contained no data. “She denied formatting the phones and stated that her staff members had handled them. She was evasive when asked about who had formatted the gadgets and on whose advice,” the report claimed.

It further alleged that Kavitha had given false evidence while her statement was recorded under Section 50 of the PMLA. The remand report said she denied holding stakes in Indo Spirits but her WhatsApp chats with her Chartered Accountant Buchi Babu and Raghava Magunta showed that she held 33 percent stakes in the firm.

ED seemed to rely on statements of ‘approvers’, including Raghava Magunta, to make a case against Kavitha’s alleged role.

The ED said she was one of the “kingpins”, a “key conspirator” and “beneficiary” of the scam. She, the ED claimed, along with other members of the South Group conspired with the top AAP leaders and gave the latter kickbacks in exchange for undue favours in the Delhi Excise Policy formulation and implementation.

“Kavitha’s involvement began when she orchestrated a deal with Delhi Chief Minister Arvind Kejriwal and the then Deputy Chief Minister and Excise Minister Manish Sisodia, now in jail,” ED claimed.

The Rouse Avenue court, on Saturday, granted bail to Kejriwal in a case related to skipping ED summons in connection with the scam.

Also Read: Revanth Reddy terms Kavitha’s arrest a ‘political stunt’ by BRS and BJP

The charge

According to ED, Kavitha along with other South Group members paid kickbacks through a string of intermediaries and middlemen. “In exchange, she was given access to the policy formulation and was offered provisions to ensure a favourable position to her”.

ED said Kavitha further got stakes in Indo Spirits through a benami, Arun Pillai, without making substantial investment and distribution rights of Pernod Ricard India Pvt Ltd, one of the biggest manufacturing companies in the country. She made Indo-Spirits, the most profitable L1 licensee. It helped in recovering the kickbacks as profits.

The ED said the policy increased the profit margin of wholesale dealers to 12 percent, allowing the South Group take a part of it back as kickbacks. It was done to create a continuous stream of illegal funds for the AAP and for the South Group to recover the kickbacks paid and make further profits.

The agency said Kavitha, through Pillai, was a partner in Indo-Spirits, a vehicle for recouping the kickbacks and generating further profit. Kavitha was involved in the transfer of ₹100 crore through her staff/associates Abhishek Boinpally and Buchi Babu to AAP Leaders.

The ED said it has been established that Kavitha, who was the holder of Pillai’s shares in Indo Spirits was intrinsically involved in the conspiracy of policy formulation, kickback scheme, and the final profits generated and proceeds of crime laundered through the firm.

The central agency said the Telangana MLC had conspired with other people and was actively involved in the payment of kickbacks to the tune of ₹100 crore and established a money-laundering ecosystem through her proxy.

Kavitha was involved in various processes and activities relating to generating proceeds of crime to the tune of at least ₹292.8 crore, the remand report added.

(Edited by Majnu Babu)