₹3,500 Cr liquor scam: Andhra Police names Jagan as beneficiary; accuses him of taking ₹50–60 Cr per month as kickbacks

Amaravati: Andhra Pradesh Police have named former Chief Minister Jagan Mohan Reddy as one of the alleged beneficiaries of kickbacks in the ₹3,500 crore liquor scam. This follows the arrest of YSRCP MP PV Midhun Reddy, a close aide of YSRCP chief Jagan Mohan Reddy.

In the chargesheet, Andhra Pradesh Police said Jagan received ₹50–60 crore per month as kickbacks.

Origin of the Case

In 2024, Yeedi Venkateswara Rao Srinivas filed a complaint with the Principal Secretary, Revenue (Excise), Andhra Pradesh, highlighting irregularities in liquor sales and distribution in the state between 2019 and 2024. Allegations included manual issuance of Order for Supply (OFS) to favor certain liquor brands, price inflation, and commission payments. He requested a thorough inquiry.

As a result, the Managing Director of APSBCL formed a five-member internal committee comprising senior officials from the APSBCL and the Excise Department to probe the allegations.

Key Findings of the Internal Committee

Between 2014–2019, liquor procurement followed a transparent system using an automated OFS model based on a set formula. After 2019, this automated process was replaced with a manual, discretionary system controlled by a special officer, paving the way for manipulation.

Although the policy restricted OFS for new brands to 10,000 cases, these limits were routinely exceeded.

Excise Policy Change Post-2019

After the 2019 Assembly elections, Jagan Mohan Reddy introduced a new excise policy that set up 3,500 Government Retail Outlets (GROs). Though presented as a step toward prohibition, the move centralized liquor distribution and allegedly enabled a syndicate of political leaders and officials to collect illegal commissions.

Who are the Syndicate Members

1. Kasireddy Rajasekhar Reddy – Former I.T. Advisor

2. P.V. Mithun Reddy – MP, Rajampet

3. V. Vijayasai Reddy – Former MP, Rajya Sabha

4. Avinash Reddy

5. Sajjala Sridhar Reddy

6. Vasudeva Reddy – Ex-MD, APSBCL

7. Dodda Satya Prasad – Former Special Officer, APSBCL

8. Paila Dileep

Formation of the Syndicate

The conspiracy began in 2019 when Satya Prasad was approached at Mithun Reddy’s residence in Tirupati and promised a conferred IAS promotion if he cooperated. A key meeting was held on 13 October 2019 at Vijayasai Reddy’s residence in Hyderabad.

After analyzing the data, the members of the meeting deduced that they could earn around.

Rupees 50-60 crores per month in the form of commissions /kickbacks from various distilleries and suppliers. The members of the meeting conspired to form a syndicate, and Vasudeva Reddy proposed that Satya Prasad would handle the supplies at depots and sales at the Government Retail Outlets (GRO) to bypass the automatic order for supply (OFS). Further, the syndicate also agreed to only favour those liquor brands and companies, for sale of liquor in Andhra Pradesh, that would pay commissions and kickbacks as demanded by them, and consequently, they intended to gain undue pecuniary advantage.

The syndicate led by Midhun Reddy effectively dictated APSBCL policies, such as pricing, discounts, and brand approvals, and misused "similar sounding brands" to inflate prices and secure illicit benefits, resulting in direct revenue loss.

An amount of around Rs. 60 crores was rotated between SPY distilleries. Sanhoc Labs and D-cart Logistics. While reviewing the bank statement of Dcart Logistics, it was observed that an amount of Rs 5 crore was credited into the account of PLR projects, which is a company owned by Midhun Reddy and his family members.

The transfer of funds from a suspicious entity to a company owned by an identified member of the conspiracy, as well as a member of the then Political Executive, could potentially point to a possible flow of funds using companies and shell companies.

Impact of Manipulated OFS and Cheap Liquor Brands

Known liquor brands were sidelined; instead, less popular brands promoted by the syndicate (like Supreme, Ocean Blue, 9 Star, etc.) were pushed into the market.

Monthly liquor sales (27–30 lakh IML cases and 7–10 lakh beer cases) generated structured commissions of ₹150–₹600 per case.

Popular brands like McDowell's and Budweiser were drastically suppressed.

Quality complaints rose from consumers, but no action was taken.

Money Laundering and Fund Diversion Tactics

Kickbacks were paid using complex methods: funds were routed through gold merchants, shell companies, and real estate firms.

Fake GST invoices for items like gold and garments were used as covers for cash generation.

Transactions were routed through hawala networks based in Hyderabad, Mumbai, and Delhi.

Some of these shell companies invested large sums in foreign countries like the UAE, the USA, and African nations without any legal financial trail.

Key Role of Mithun Reddy

According to investigators:

1. Mithun Reddy is a core conspirator from inception to execution, orchestrating policy changes and coordinating with co-accused to secure kickbacks from distilleries/suppliers

2. He lured the public servant (Accused number 3 ) Satya Prasad with the promise of Non-SCS IAS promotion, and ensured his appointment as Special Officer to implement the conspiracy.

3. He directly influenced APSBCL officials participated in multiple planning meetings, and issued instructions that led to massive financial loss to the State.

4. He routed kickbacks via entities like SPY Agro, Sanhoc Labs, and Dcart Logistics, with ₹5 Crores credited to PLR Projects Pvt. Ltd.--a company closely linked to the A.4 family.

5. Mithun Reddy discloses a ₹47.74 Crore liability to PLR Projects Pvt. Ltd., confirming financial ties.

5. The ill-gotten money was spent during the General Elections-2024 within several constituencies in the State of Andhra Pradesh for obtaining undue political advantage.

Allegations Against Y.S. Jagan Mohan Reddy

In mid-2019, a meeting at Hotel Park Hyatt, Hyderabad, led by Sajjala Sridhar Reddy, instructed distilleries to follow a manipulated liquor distribution model. Distillers were threatened with exclusion if they didn’t comply. Kickbacks began at 12% and increased to 20% of the base price.

"Funds were collected by Kesireddy Rajasekhar Reddy and routed to Mithun Reddy, Vijayasai Reddy, and eventually to then CM Y.S. Jagan Mohan Reddy," according to the chargesheet. The chargesheet highlights that these collections averaged ₹50–60 crore per month.

Election Funding Angle

Investigators allege that a portion of the illicit funds was used for voter inducement and election manipulation during the 2024 Andhra Pradesh elections.