Delhi Liquor Policy Scam: ED says Sarath Chandra a kingpin of south lobby; gave Rs 100 crore bribe

Hyderabad: Enforcement Director has revealed that Aurobindo Pharma director Sarath Chandra Reddy gave a bribe of Rs 100 crore through businessman Vijay Nair to different officials.

On Thursday, the Enforcement directorate told the CBI court that Penaka Sarath Chandra Reddy- Director of Hyderabad-based Aurobindo Pharma Limited, is one of the kingpins and major beneficiaries in the Delhi Liquor Policy Scam.

Ed said he is the "key partner" in the biggest cartel (named as a south group by Dinesh Arora in his statement) of manufacturers, wholesalers, and retailers.

Three days after questioning, sleuths of ED arrested Hyderabad resident Penaka Sarath Chandra Reddy in Delhi and on the same day produced him before a CBI special court. The court sent him to 7 day CBI remand.

Hours after his arrest, a statement from the company said, "Further to the disclosure of even date, Company further learnt that the arrest of P. Sarath Chandra Reddy, Whole Time Director/Promoter Group of the Company, is not in any way connected with the operations of Aurobindo Pharma Limited or its subsidiaries".

The company primarily informed its shareholders.

It is pertinent to mention that Reddy is the son of P.V Ram Prasad Reddy who is the non-executive director of Aurobindo and brother of P. Rohith Reddy- who happens to be the son-in-law of YSRCP Rajya Sabha MP Vijay Sai Reddy.

What happened in the court?

On the day of the arrest, ED produced Sarath Chandra Reddy and Benoy Babu, regional head of the French wine company `Pernod Ricard' before the CBI special court. ED told the court that the accused had formed a 'cartel' to effectively 'control' 30 percent of Delhi's liquor market. In this cartel, the accused formed a 'south lobby'.

ED officials told the court that Sarath Chandra Reddy who is reportedly the key partner of the south lobby gave a bribe of Rs 100 crore through businessman Vijay Nair. It is to note that Vijay Nair was earlier arrested by CBI.

"Sarath Chandra Reddy, who played a key role in the south lobby planned and conspired with various business owners and politicians. He indulged in unfair market practices to gain an advantage in the Delhi excise policy," the ED alleged.

The agency said that investigation into the scam has indicated that the government officials reportedly "leaked" the policy to certain liquor manufacturers on May 31 last year, two months before it was made public. It was put in the public domain, on July 5, 2021.

In the Delhi Liquor scam alone, the CBI and ED have so far conducted 169 search operations. Liquor policy is currently being investigated by the Central Bureau of Investigation (CBI) and Enforcement Directorate (ED) following a directive from Delhi's Lieutenant Governor VK Saxena.

Former CEO of Trident Chemphar alleged torture by ED officials

As the news of Sarath Chandra Reddy's arrest hit headlines, former CEO of Trident Chemphar Earla Chandan issued a letter claiming that he was allegedly harassed by ED officials in Hyderabad and pressured to give a statement which resulted in the arrest of Sarath Chandra Reddy.

Excerpts of the letter:

"I was appointed for overseeing the retail liquor business operations of Trident Chemphar Limited, a company under the same management (referring to Aurobindo). The entire operation lasted about seven months at the end of which the Liquor Policy under which the company had been awarded the contract was scrapped.

It came to my knowledge from newspapers that CBI had registered an FIR and was investigating some irregularities in the policy, which perhaps is now also being investigated by the Enforcement Directorate.

On September 16, 2022, while I was at home, around 6.30 am certain ED officials came to search my residence in Hyderabad and seized some articles as per the seizure memo dated 16.9.22. A copy of this is enclosed herewith for your kind reference.

On the same day, I was handed over summons under Section 50[2] [3] of the Prevention of Money Laundering Act, 2002 which stated that I was required to come to the Zonal Office of the Directorate of Enforcement situated at 3rd Floor, Shakar Bhawan, Fateh Maidan Road, Hyderabad ED for a personal deposition.

As required I went to the Zonal Office of the Enforcement Directorate. Upon reaching the ED Zonal Office the officials present there asked some questions about the business operations of retail liquor in Delhi, and I answered all questions to the best of my knowledge and recollection.

During the interrogation, the officers concerned started asking questions of which I had no knowledge or answers. When I was unable to give answers to the questions I was told that should answer the questions in the manner required by them. On my refusal, I was assaulted and severely beaten up. I was threatened with dire consequences. They also threatened my family and relatives with dire consequences if I did not write and sign the papers as required by the ED Officials. The assault and beating were so severe that I suffered from loss of hearing in both ears. Ultimately I was made to forcibly sign on papers and state certain things which are contradictory to the facts and some of which I do not know. The statements attributed to me on which my signatures have been obtained are my signatures have been completely false and contrary to the record. I do not know the facts mentioned therein.

All statements, admissions, or signatures obtained on papers of any nature made before the officers of the Enforcement Directorate present at the Zonal office on 16.09.2022 till the time of my release on the next day on which my signatures have been forcibly obtained coercion, duress, and the threat of physical injury. I, therefore, retract them in totality.

Upon my release, I was immediately hospitalized in a private hospital and then moved to a government hospital. My tests for hearing loss were conducted. Due to the assault and beating, I have suffered hearing loss in one ear and partial hearing loss in another. This is entirely attributable to the severe beating and violence against me by the officers of the Enforcement Directorate to extract false statements and get me to sign papers and sign papers and state certain things which are contradictory to facts.

I was discharged from the government hospital on 21.9.22 and now slowly recuperating from the mental and physical agony caused to me by the ED officials on the day of the search and interrogation held on September 16, 2022, which lasted till 17th September 2022.

My diagnosis and treatment have been meticulously recorded by the hospital.

The questions were answered as per the whims of the ED officials under coercion and duress. The answers and replies given by me in the statement such as "removing the servers at the behest of Sarath, running all the three companies" operations by me and Sarath, recording the cash sales figures much lesser than the actual and using the differential amounts for giving bribes to high profile people" were completely false and made against under facts and coercion duress as a consequence of the third-degree measures used by ED officials. I am unable to fully recollect what other replies I have given in the statement under duress at this point and moment as I am slowly recovering from the mental trauma and agony caused by ED officials on 16.09.2022 till the time of my release.

I would like to place on record at this point that whatever statements or papers got signed from me by the ED Officers on September 16th, & 17th 2022 till the time of my release were not given out of my free will, and consent was made under coercion duress and as a consequence of third-degree measures used by the FD officials

Given the above facts, I hereby retract and withdraw any and every statement attributed to me and every document on which my signatures have been obtained by the Enforcement Directorate Officials in the facts and circumstances stated above.

Needless to say that subject to my state of health I am ready and willing to cooperate in the investigation, but I would request that if any information or statement is required from me in the future it may only be done in presence of my lawyers.

NewsMeter tried to reach Earla Chandan, however, his phone remained switched off.