Delhi’s Liquorgate Reaches Andhra
This is part 2 of the series on the links between Delhi Government’s Liquorgate and the Telugu states of Andhra Pradesh and Telangana. Read par 1 here.
AAP’s Delhi Liqour Scam has far reaching roots all the way down to Andhra and Telangana’s ruling parties, based on Enforcement Directorate’s (ED) investigations and initial reports.
As of this week, the latest addition to an earlier list of persons to be named from the Telugu states, in the ED report, is K Kavitha, the daughter of Telangana Chief Minister and leader of the ruling BRS party (formerly TRS) , K Chandrasekhar Rao. In its report, the ED refers to individuals involved from the South, as the “South group”.
Last month, the ED arrested Sarath Chandra Reddy, a Director in the Hyderabad-based Aurobindo Pharma company and Benoy Babu, general manager, International (Liquor) Brands- Pernod Ricard India, in connection with its money-laundering probe into irregularities in the now-scrapped, liquor policy of the Delhi government. They are accused of alleged corruption in the formulation and implementation of the excise policy for the National Captial. Senior AAP leader and Delhi Deputy Chief Minister, Manish Sisodia has also been named as a party to the Delhi “Liquorgate” scandal.
Sarath Chandra Reddy’s purportedly deep and far-reaching involvement in the Delhi liquor policy scam, is politically significant as the family of Sarath Chandra Reddy is related to Vijayasai Reddy, a close aide and confidante of the Andhra Pradesh Chief Minister, YS Jagan Mohan Reddy. Sarath Reddy is the brother of Rohith Reddy, son-in-law of YSRCP general secretary and Rajya Sabha Member of Parliament (MP) Vijayasai Reddy.
Sarath Reddy has been on the Central Bureau of Investigation’s (CBI) scanner, for several years now. He was one of the accused in the alleged quid pro quo case probed by the CBI against YSRCP president and present Andhra Pradesh chief minister Y S Jagan Mohan Reddy in 2012.
In March 2012, the CBI had filed a case against Sarath Chandra Reddy, then heading Trident Life Sciences (a subsidiary of Aurobindo Pharma company), for allegedly receiving favours from Jagan Reddy’s father and former chief minister of Andhra, Y S Rajasekhar Reddy’s (YSR) government, in the form of land allotment at low prices, in return for “investing” at an exaggerated premium, in his son Jagan Mohan Reddy’s Jagati Publications Private Ltd. In the 2012 chargesheet against Jagan Reddy, the CBI alleged that Sarath Chandra Reddy had invested Rs 7 crore in Jagan Reddy’s Jagati Publications Private Ltd, at an exaggerated premium of Rs 350 per share, and charged him under IPC sections 120-B and 420.
The stench of the Delhi liqour scam with the Enforcement Directorate’s (ED) investigations, unraveling names of high profile people connected to Andhra and Telangana’s ruling parties (YSRCP and BRS/TRS respectively) is being sniffed around, by opposition parties in both states and may have political ramifications, directly or indirectly. Telangana goes to polls in 2023 and Andhra in 2024.
The ED told the Court that Reddy was “one of the kingpins” and a “major beneficiary of the cartelisation” whose cartel group “controlled 30% of Delhi liquor market”. It also accused him of giving a bribe of 100 crore to Delhi Excise officials through AAP Communication in-charge Vijay Nair. ED sources further added that Reddy was instrumental in the cartelisation of licences and played a role in “moving” or facilitating alleged kickbacks in the entire liquor licensing process, adding that Benoy Babu was also a part of the cartelisation process.
At the time of the arrests last month, Andhra CM Jagan Reddy’s YSRCP party was quick to allege, that there was “no basis” for the arrest of Sarath Chandra Reddy, brother of YSRCP leader and MP, Vijayasai Reddy’s son-in-law. YSRCP party leaders claimed that, during a raid on a subsidiary of the Aurobindo Pharma company in September, ED officials had used “undue” force on an employee holding a key position and “forced” him to sign “pre-written” documents. They further stated, “The CBI had no evidence in the case and ED could not find anything (substantial) in the search that was conducted”.
Another accused from the “South group” in the ED report, is Magunta Srinivasulu Reddy, a YSRCP party leader and MP from Andhra’s Ongole. He denied having any links with the case. He has claimed that the liquor lobby in North India was conspiring against businessmen from the South!
Andhra CM Jagan Reddy and his YSRCP party find themselves in a hot spot, with their close, undeniable connections to two of the main “south group” accused individuals in the Delhi liquor scam- Sarath Chandra Reddy (brother of the son-in-law of YSRCP MP, Vijayasai Reddy) and Magunta Srinivasulu Reddy, a YSRCP leader and MP.
Rise Of The Phoenix: Vijayasai Reddy’s Rise And Importance In Jagan Reddy’s YSRCP
Vijayasai Reddy, a close confidante of Andhra CM, is often described as a strategist, irreplaceable aide and financial advisor to YSRCP leader and incumbent Andhra Chief Minister, Y.S.Jagan Mohan Reddy. The 64-year-old Rajya Sabha MP and YSRCP national general secretary, Vijayasai is a chartered accountant (CA) with offices in several cities. He has been close to the YSR family since 1980, when he first met the late Y S Rajashekara Reddy (YSR), Jagan’s father and former Andhra CM, at a marriage ceremony. Vijayasai became the financial advisor to the YSR family, specifically to Jagan Reddy, who had several businesses at the time. In 2006, YSR had even nominated him to a coveted position on the Board of the Tirumala Tirupati Devasthanam (TTD) for two terms.
In 2012, both Vijayasai and Jagan Reddy were arrested by the Central Bureau of Investigation (CBI) in a Disproportionate Assets case, against Jagan Reddy. The CBI alleged that Jagan had, in a criminal conspiracy with others, received bribes from various companies and individuals who had invested in his group companies from 2004-2009, as a ‘quid pro quo’ deal for securing undue favours from Jagan’s father, the then Andhra Pradesh CM, YS Rajasekhar Reddy (YSR). Simultaneously, the Enforcement Directorate (ED) also filed cases of money laundering against Jagan.
The 2012 charges against Vijayasai Reddy include, criminal conspiracy to cheat, criminal breach of trust, falsification of accounts and criminal misconduct. In addition, he was also charged of playing a dubious role in the sale of shares worth 533 crores, of Sandur Power Company. He is referred to as “A2” in the ED’s Disproportionate Assets charges, whilst Y.S.Jagan Mohan Reddy is referred as “A1”.
Both Jagan Reddy and Vijayasai Reddy were released on bail in 2013 after which Vijayasai reportedly gained more trust with Jagan. He became a close, trusted friend and advisor to Jagan in his business, financial matters as well as political matters. Jagan Reddy lost the Andhra Pradesh elections in 2014 but won in the 2019 state elections. Jagan became Andhra’s Chief Minister and Vijayasai became his trusted problem solver, chief strategist and advisor. Rumor has it that it was Vijayasai who advised Jagan to hire Political Strategist, Prashant Kishor ahead of the 2019 elections, which resulted in a win for Jagan.
Both Jagan, whose party’s MP is implicated in the Delhi liquor scam and Vijayasai, whose son-in-law’s brother is embroiled in the same scandal, are Andhra “VIPs” and leaders enjoying the pleasures of power, while still out on bail!
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Delhi’s ‘Liquorgate’ Is Flowing Into Telangana
The latest from the Telugu states to fall from grace in the scandalous Delhi Liquor Policy case, is Telangana Chief Minister, K Chandrasekhar Rao’s (KCR) daughter K Kavitha.
Kavitha, a BRS (formerly TRS) party leader, member of Telangana Legislative Council and daughter of the state’s current Chief Minister, has been named in the Enforcement Directorate’s (ED) probe, as one of the members of what the ED calls the ‘South Group’, in a reference to persons from South India, who are involved in the Delhi excise racket.
K. Kavitha’s name surfaced in the remand report filed by the ED on Wednesday, for custody and investigation of businessman, Amit Arora in connection with the Delhi liquor policy scam. According to the remand report, businessman Vijay Nair, who has already been arrested in the case, received kickbacks of ₹100 crores on behalf of AAP leaders from a group, called the ‘South Group’.
Manish Sisodia, a senior AAP leader, Delhi Deputy Chief Minister (holding the Excise portfolio, among others) and a close aide of Delhi Chief Minister, Arvind Kejriwal had also been named in the ED’s report. The ED’s remand report alleges that AAP’s Delhi liquor policy, promoted unhealthy, illegal “cartel” formations through a secret “back door” entry for certain members and awarded them exorbitant wholesale (12%) and retail (185%) profit margins as well as other illegal incentives/opportunities, the profitable rewards of which, would eventually be funnelled back into the accounts of some AAP leaders, for personal and party benefit.
In other words, the ED in its investigations unearthed a “front” organization or a “shell” company controlled by the individuals of the “south group” with the involvement of certain individuals (Vijay Nair, Amrit Arora and others) that enabled huge profit margins for these individuals, who in turn would pass on a percentage of the profits to members of the AAP, for personal or party benefit. The ED has alleged a criminal conspiracy between the leaders of AAP and individuals cited in its investigation report. The investigation is an ongoing one, likely to reveal more complex twists to a sordid financial conspiracy, linking AAP’s Delhi government, its cleverly formulated Liquor policy and a group of individuals acting as a liaison to enable kickbacks for the AAP.
The ED report states “The 12 per cent margin to the wholesalers was devised to extract half of it, as a kickback to the AAP leaders. Vijay Nair, on behalf of leaders of AAP has received kickbacks to the tune of Rs 100 crores from the ‘South Group’, controlled by Sarath Reddy, Magunta Srinivasulu Reddy and K Kavitha. The same has been disclosed by the detained Amit Arora in his statements”.
All three individuals named in the ‘south group’ so far, are Telugu. News of Kavitha’s alleged involvement in the Delhi liquor scam, comes several days after the ED’s earlier reports had already indicated a full blown involvement of individuals from the Telugu states of Andhra and Telangana, including businessmen with reportedly close ties to prominent political leaders of the states / current ruling parties.
This is the first time that the Telangana leader K Kavitha’s name has figured in the investigation, although accusations of her direct or indirect involvement, were first made back in August, by BJP MP Parvesh Varma and former MLA Manjinder Singh Sirsa.
In a swift, defensive action and clever legal ploy to deflect negative publicity for herself, her father and her political party, K Kavitha has filed a defamation case in Hyderabad against the BJP, predictably claiming political vendetta. A city civil court in Hyderabad, has issued an interim order based on her plea, directing BJP leaders not to make any defamatory statements against Kavitha, while the probe was still underway and investigations were still ongoing.
Kavitha spoke of political over-reach, claiming that the BJP was trying to tarnish the image and reputation of her father, the Telangana Chief Minister, K Chandrasekhar Rao (KCR) and his family by making baseless allegations, as he and his party have been fearless and vocal critics of the BJP’s policies. She also claimed that the BJP government at the centre, excercised “control” over all the investigative agencies in the nation and that cases have been filed against Opposition leaders indiscriminately. Kavitha reiterated that she would cooperate in the ED’s investigative efforts.
The Bharath Rashtra Samithi party (BRS, formally TRS- Telangana Rashtra Samithi) was until recently, a Telangana-based regional party, founded and headed by Kavitha’s father, K Chandrasekhar Rao. KCR had founded the party in 2001 with the aim of demanding a separate statehood for the Telangana region within the larger, unified Andhra Pradesh state. This goal was accomplished in 2014 under the aegis of the Congress-led UPA government, when the erstwhile Andhra Pradesh state was bifurcated into Andhra and Telangana. Since the 2014 creation of a new Telangana state, KCR’s party has dominated the state’s political scene and has been the ruling political party there, for two consecutive terms.
Kavitha and her brother, K T Rama Rao are leaders in her father’s party, holding important, high visibility leadership and legistative posts. With the BJP’s meteoric rise after the 2018 state elections and its rapid growth in Telangana , the incumbent BRS (formerly TRS) party appears to be insecure about its supremacy in the state and has begun to sound defensive about its own supposedly effective developmental and “secular” policies versus those of the BJP’s economic policies which it claims are, trumped up, inadequate and ineffective measures with a “communal” agenda. The party’s leadership began to feel threatened enough, to start considering National alliances and a possible “third front” as an alternative to both a BJP-led or a Congress-led alliance.
In line with its new ambitions, the regional TRS (Telangana Rashtra Samithi) party recently applied for a pan-Indian presence with the Election Commission of India (ECI) and re-christened itself, BRS- Bharat Rasthra Samithi.
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