YSRCP MP Midhun Reddy arrested in AP Liquor Scam; SIT probes bribery and policy manipulation

Amaravati: YSRCP MP PV Midhun Reddy has been arrested in connection with the alleged Andhra Pradesh liquor scam. On Saturday, he was interrogated by the Special Investigation Team (SIT) for nearly seven hours at their Vijayawada office. The questioning focused on the formulation of the state’s liquor policy and the alleged routing of bribes through shell companies.

The SIT investigation intensified after the High Court dismissed Midhun Reddy’s anticipatory bail plea. Officials questioned him about the flow of funds from shell companies to beneficiaries, suspecting deep-rooted financial misconduct during the YSRCP regime.

Midhun Reddy, who serves as YSRCP's floor leader in the Lok Sabha is considered a close aide of party chief YS Jagan Mohan Reddy. He has been named as A4 in the FIR.

Midhun Reddy has been sent to judicial custody till 1 August. He was sent to Rajamundry Central Jail.

What are the reasons for his arrest?

Based on the investigation so far, Midhun Reddy is a core conspirator from inception to execution, orchestrating policy changes and coordinating with co-accused to secure kickbacks from distilleries/suppliers

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

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

3. 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 Midhun family.

4. Midhun Reddy disclosed a ₹47.74 Crore liability to PLR Projects Pvt. Ltd., confirming financial ties. Dcart Logistics (from which PLR received ₹5 Cr) is directed by A.9, the PA of A.1 and he also holds interest in Shiva Shakthi Dairy Pvt. Ltd. In this PLR group entity, his mother and sister are directors, reinforcing his connection to PLR and the illicit fund flow.

5. Call Data Records/ Location analysis from the year 2023 (Telecom Service Providers do no retain CDR data beyond two years period) shows that several accused have met him at various palces in Hyderabad, Vijayawada, Tadepalli, especially established cash handlers in the crime have met frequently. It is to be revealed in the investigation through his custodial interrogation, as to the purpose of the meeting and where the kickback money is routed, by confronting the accused and witnesses.

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

What was the liquor scam about?

The YSRCP government, after coming to power in 2019, introduced a new liquor policy, claiming it was part of a phased prohibition plan. Under this policy, the State took over nearly 3,500 liquor stores through the Andhra Pradesh State Beverages Corporation Limited (APSBCL). Liquor shop operating hours were reduced, prices increased, and many well-known brands were replaced with new, lesser-known labels—dubbed ‘Jagan brands’—such as Boom, President Medal, Napoleon and Block Bister.

The APSBCL also controversially switched to cash transactions at all outlets, citing operational challenges with digital payments. Critics claim this move enabled large-scale financial misconduct.

Earlier arrests and interrogations

On April 21, SIT arrested Kasireddy Rajashekar Reddy, the alleged mastermind and former IT adviser to Jagan, at Hyderabad’s Rajiv Gandhi International Airport. Along with him, his personal assistant Dilip Kumar and another accused, Chanaky, were also taken into custody and remanded to judicial custody.

Kasireddy allegedly devised the excise policy with Jagan’s approval to raise funds for the government and party. Though he did not sign a confessional statement, his remand report indicated he orchestrated the collection of nearly Rs 60 crore per month in kickbacks from distillers by promoting select liquor brands while suppressing popular ones. The funds were reportedly funnelled through intermediaries.

Several political figures, including former MP V Vijaya Sai Reddy have been questioned in the widening probe.