Today, Friday, the Enforcement Directorate seized movable and immovable assets $441.63 crore belonging to various accused in $The Rs 3,500-crore liquor case in Andhra Pradesh allegedly happened during the regime of former Chief Minister YS Jagan Mohan Reddy.
An official statement of the central agency said that the seized properties belong to the main accused Kesireddy Rajasekhar Reddy, his family members and related persons. His assistant Puneeti Chanakya and his family members; Former Managing Director of AP State Beverages Corporation Ltd (APSBCL) Donthireddy Vasudeva Reddy and others.
“The seizure has been made under the provisions of the Prevention of Money Laundering Act (PMLA), 2002 in the liquor scam. The seized properties are in the form of bank balances, fixed deposits, plots of land and other immovable properties,” a statement issued by the department said.
It said the agency initiated investigation on the basis of an FIR registered by the State Police Criminal Investigation Department under Sections 120-B, 409 and 420 of the Indian Penal Code for causing loss to the government exchequer to the tune of Rs. $3500 Crores.
The investigation revealed that the previous government monopolized liquor retail outlets through APSBCL-run government retail outlets, the ED statement said. “As part of the criminal conspiracy, the automated system was deliberately disabled and replaced with a manual system, thereby giving unfettered discretionary powers to APSBCL officials in issuing Orders for Supply (OFS),” it said.
YSRCP has always maintained that all such allegations are baseless.
The manual OFS system has been misused to discriminate against liquor brands, which have been deliberately marginalized or removed from the market, the ED said. At the same time, preferential and irregular allocations to select “preferred” brands when receiving commissions were expanded.
The investigation also revealed that distilleries were forced to pay illegal commissions of between 15% and 20% of the base price of each case as a precondition for obtaining FSB approvals. “Manufacturers who refused to comply were subjected to coercive measures, including withholding legitimate payments and rejecting supply orders,” it added.
The ED investigation revealed that Kesireddy Rajasekhara Reddy, along with other members of the liquor syndicate, organized a multi-crore scam in the liquor procurement and distribution system of Andhra Pradesh. “The proceeds of crime generated from this fraud were laundered and distributed to members of the syndicate for personal enrichment,” he said.
Another identified source of illicit revenue generation was the manipulation of liquor transportation contracts awarded through a tender floated by APSBCL. The investigation revealed that a central transportation tender was awarded to a private company at prices much higher than previous transportation costs in warehouses. The executive director said that operational control over the transfer process was exercised by union members.
Public Security Directorate investigations revealed that by manipulating purchasing and supply mechanisms, the syndicate achieved illegal revenues estimated at approximately $100 crores per month. “The physical cash commissions were collected and stored at multiple locations in Hyderabad, where they were subsequently transported, distributed or disposed of by cash handlers appointed to the syndicate,” it said.
ED investigation has so far revealed a financial impact of $1048.45 crore in the form of commissions which many distilleries had to pay in the form of cash, gold etc. and also in the form of monitoring and operation of some distilleries by the Liquor Syndicate and also in the form of financial gains derived from transportation of liquor.
The PMLA investigation revealed that the proceeds of crime were used to purchase immovable property and personally enrich the liquor syndicate members and their associates. A statement issued by the ED said further investigations are underway.
