MLC Kavita, YSRCP MP Magunta, Aurobindo's Sarath Reddy controlled 9 liquor retail zones in Delhi: ED

The Cartel controlled 9 retail zones in Delhi including 2 in Khao Gali. Out of the 9 zones, two were controlled by Magunta's son Raghav in the name of Magunta Agro firms and 5 by P Sarath Reddy in the name of Trident, Organomix, and Avantika.

The South group showed interest in investing in the Delhi Excise policy since they had deep pockets, strong political connections, and were allies of Delhi Chief Minister Arvind Kejriwal.

Enforcement Directorate (ED) filed a prosecution complaint (chargesheet) in the Delhi Liquor policy scam before the sessions judge in New Delhi on December 20.

The Chargesheet echoes the ED's earlier remand application report regarding the involvement of BRS MLC K Kavitha, YSRCP MP Magunta Srinivasulu Reddy, and Aurobindo Group's MD P.Sarath Reddy.

ED has named Kalvakuntla Kavitha as one of the key members of the 'South Group'. ED said arrested businessman Vijay Nair, on behalf of AAP leaders, received kickbacks to the tune of Rs. 100 Crore from 'South Group'.

Against the kickbacks paid, the South group secured uninhibited access, undue favors, and attained stakes in the wholesale business and multiple retail zones.

The retail business was highly lucrative and the members of the group received high profits on daily bases. The retail sales were in cash.

The arrest of businessman Sameer Mahandru opened a can of worms. Much against BRS MLC Kavita's claim of not being involved in the scam, the ED's charge sheet indicated that she held several meetings at her residence in Hyderabad, 5-star hotels in Delhi, and even held conferences via facetime.

Accused from Hyderabad:

Boinapally Abhishek Rao: A close associate of BRS MLC K Kavitha, he is allegedly involved in transferring kickbacks and operating the retail zone of Aurobindo Group MD P Sarath Reddy. Boinpally Abhishek Rao has been arrested by CBI.

Arun Ramachandra Pillai: A partner in Indo-sports, he was allegedly acting on behalf of BRS MLC K Kavitha. He is a close aide of P Sarath Reddy and Magunta Srinivasulu. He invested Rs 5 Crore in `Indo Sports' and received a profit of Rs 17 crore. He holds a 35 % stake in Indo Sports.

Arun Ramachandra Pillai was booked by the CBI. He would collect the bribe amount from Sameer Mahandru and further hand it over to Vijay Nair who is accused of bribing government servants in the Delhi Excise department.

Sameer is the owner of Indo sports and other businesses. Arun represented BRS MLC Kavitha in most of the internal meetings. In one instance, when Arun bagged a partnership, MLC Kavita did a face time with Sameer and congratulated him, ED said.

Accused Sameer met Kavitha in early 2022 at her residence in Hyderabad, where her husband Anil as well was present.

How would the South Group recover the Rs 100 Cr kickbacks?

The South Group was given a 65% stake in a company called Indo sports in collusion with accused Sameer Mahendru. It was the south group that controlled the major stake in the company through proxies. The group also enjoyed the profits of Indo sports.

Destruction of evidence:

BRS MLC Kalvakuntla Kavitha changed the device of her both phone numbers 10 times. Likewise, Hyderabad-based Aurobindo Group Managing Director P Sarath Reddy, who was earlier arrested by ED, reportedly changed his phone device nine times.

ED said the accused and suspects destroyed digital evidence to impede the investigation.

"An attempt was also made to see that the evidence about the commission of this scam running into thousands of crores was either destroyed which would contain valuable digital data and material to prove further kickbacks," ED said.

Pertinently, major evidence related to liquor scam were stored in digital formats both on mobile phones and laptops, However, as soon as the scam was unearthed and the case was handed over to investigating agency, a large number of digital devices were found to be destroyed or changed by the suspects.

According to ED, at least, 36 accused and suspects involved in the scam have destroyed or used 170 phones (as per IMEI analysis).

In Short:

The first FIR was filed by the CBI- ACB unit in August against Delhi's Deputy Chief Minister Manish Sisodia and 16 others for irregularities in framing and implementing Delhi's Excise policy.

Investigation revealed that the new excise policy was created to generate illegal funds. It promoted cartelization and the back door process awarding a retail margin of 185 % and wholesale of 12 %.

Out of the 12 % margin, the system was designed in a way that a 6 % margin would go to AAP - probe

Enforcement Directorate which was parallelly investigating the case under money laundering carried out 171 search operations across Telangana, Andhra Pradesh, Maharashtra, Tamil Nadu, Punjab, and Harayana.

The search led to the seizure of documents and the arrest of Sameer Mahandru, P Sarath Reddy, Benoy Babu, Vijay Nair, and Abhishek Boinapally.