The Enforcement Directorate (ED) on Monday questioned retired IAS officer K Dhanunjay Reddy and three others in connection with the incident. $A Rs 3,500-crore liquor scam allegedly took place during the previous government in Andhra Pradesh under the YSR Congress party between 2019 and 2024, people aware of the developments said.
Apart from Dhanunjay Reddy, who worked as Additional Secretary in the Prime Minister’s Office, he questioned the CEO P Krishna Mohan Reddy, who was a former officer on special duty of the then Prime Minister YS Jagan Mohan Reddy; Cherukuru Venkatesh Naidu, a close aide of former MLA Chevireddy Bhaskar Redddy and Puneeti Chanakya, a close relative of accused no. No. 1 in Kesireddy case Rajasekhar Reddy alias Raj Kesireddy.
The four accused appeared before ED officials in Vijayawada as part of the ongoing probe into alleged irregularities in the state’s liquor policy during the previous government.
An official familiar with the matter said that emergency department authorities interrogated the accused for about two hours. After the first round of interrogation, Krishna Mohan Reddy left the ED office, while the remaining accused continued to be interrogated by investigators until the evening.
The central agency is investigating widespread alleged irregularities in the implementation of the alcohol policy under the previous regime. According to the initial assessment conducted by the General Directorate of Security, the alleged violations in the alcoholic beverages trade caused a loss of approximately $3,500 crores to the state exchequer.
During interrogation, according to the official, the ED officials sought clarifications from the accused regarding the drastic changes made in the liquor policy at that time. Investigators are examining claims that the policy was changed in a way that only allowed alcohol manufacturers who paid huge bribes to operate and secure supply contracts.
The CEO is also investigating allegations that bribes collected through the liquor trade were routed through a network of shell companies before being transferred to the defendants’ accounts. Officials are collecting details about the financial trail and the role each of the suspects played in transferring the alleged money.
As part of the ongoing investigation, the ED has directed the accused to appear for further questioning with additional documents, including their bank statements, PAN card details and information regarding assets held by their family members.
In connection with the liquor scam case, the ED on Friday attached assets worth more than $441.61 crore belonging to prime accused Raj Kesireddy, Chanakya and former managing director of AP State Beverages Corporation Ltd (APSBCL) D Vasudeva Reddy as part of the money laundering probe.
The investigation into the financial transactions and alleged violations of the alcohol policy remains ongoing.
“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 had 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.
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.
