ED arrests son of YSRCP MP Magunta Srinivasulu Reddy in Delhi liquor scam case

Both Malhotra and Joshi were arrested by the ED a few days ago.

Raghava has been arrested within a few days of the arrest of Hyderabad-based chartered accountant Butchibabu Gorantla by the CBI, also in connection with the Delhi liquor scam.

Butchibabu was the former auditor of BRS MLC K Kavitha whose name was also figured in the case as part of a so-called “South Group” that was masterminded the scam.

The ED is probing the case based on the FIR issued by the CBI.

Related: YSRCP MP Magunta cries foul as ED raids his residences

Supplementary charge sheet

In a 428-page prosecution complaint on the supplementary charge sheet — filed with the Rouse Avenue District Court in Delhi on 6 January — the ED stated that the scam was scripted at Delhi’s Oberoi Hotel and that Kavitha had coordinated with AAP.

In the prosecution complaint, the ED had listed 17 names, including companies, as accused in the case.

They are Sameer Mahendru and four companies owned by him, AAP’sVijay Nair, P Sarath Chandra Reddy and three companies owned by him, Benoy Babu of liquor firm Pernod Ricard, a company owned by Rajesh Mishra, Hyderabad businessman Abhishek Boinpally, and Amit Arora and three companies owned by him.

The ED said that ₹100 crore mobilised by the so-called “South Group”, in which the names of Kavitha and YSRCP MP Magunta Srinivasulu Reddy had figured, had reached AAP and that the amount was spent in the 2022 Goa election where the party was contesting.

Undue favours

Against the kickbacks that were allegedly paid, the “South Group” secured uninhibited access, undue favours and attained stakes in established wholesale businesses and multiple retail zones over and above what was allowed in the policy, the ED has said.

To recover the kickbacks, the partners of the “South Group” were given 65 percent of stakes in the company IndoSpirits, in collusion with its owner Sameer Mahendru.

This partnership formation was directed by Nair on assurance of giving the wholesale business of liquor firm Pernod Richard to IndoSpirits of Sameer Mahendru, the ED has said.

The “South Group” controlled the stakes in IndoSpirits through false representation, concealment and proxies, the ED has contended.

Related: ‘ED forced witnesses to sign pre-dictated statements’

Magunta Srinivasulu’s denial

In September last year, following raids on his residences across the country by ED, YSRCP MP Magunta Srinivasulu Reddy pleaded innocence and also cried foul.

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

He said his name was being dragged into the Delhi liquor scam by a group of north India-based liquor traders as part of a conspiracy.

While admitting that ED had in fact raided his residences, Reddy said there was no wrongdoing by his family-run company that has been in the liquor business for the past seven decades.

He also claimed that ED teams did not find anything incriminating during the raids.

Following the raids, Reddy said: “Our family has been in the liquor business for the last 70 years. It was started by my father Raghav Reddy in 1952. After I entered politics, I disassociated myself from all the business activities of my family. I am neither a stakeholder nor a director in any of the companies and businesses run by my family members.”

He added: “My name has been dragged into the Delhi liquor scam by a group of north India-based liquor traders as some of my relatives — not members of my immediate family — bagged the rights to open a few liquor shops in Delhi through the online bidding process.”

“I believe my relatives run companies that got liquor trade licenses in two zones of the total 32 zones in Delhi,” he claimed.

“It’s all a conspiracy for character assassination. The ED raided my residences in Nellore, Delhi, and Chennai. They did their duty, but they didn’t find anything incriminating. We have done nothing wrong,” asserted Reddy.

The industrialist-turned-politician and a four-time MP’s family runs the Balaji Group of companies and distilleries, and has operations in at least eight states.