Andhra Pradesh Ex-CM Jagan Reddy Named In Alleged Rs 3,500 Crore Liquor Scam

Andhra Pradesh’s former chief minister YS Jagan Mohan Reddy was named in the chargesheet filed by the state police on Saturday in the Rs 3,500 crore alleged liquor scam in a local court, mentioning him as one of the recipients of the kickbacks averaging Rs 50-60 crore per month.

While the court is yet to take cognizance of the chargesheet, the 305-page chargesheet named Jagan only as the recipient of the kickbacks, not as accused.

Jagan on X stated that the alleged liquor scam is a manufactured narrative, created for media theatrics and to divert attention from real issues. He added that the case is built on statements extracted under pressure, threats, third-degree torture and also through bribes and inducements.

Meanwhile, the chargesheet claims, "The collected amounts were eventually handed over to Kesireddy Rajasekhar Reddy(A-1)".

"Rajasekhar Reddy would then pass the money to Vijay Sai Reddy (A-5), Mithun Reddy (A-4), Balaji (A-33) who would transfer it to former Chief Minister Y S Jagan Mohan Reddy. On an average, Rs 50-60 crore was collected every month (during the 2019-24 YSRCP regime)," the charge sheet said, adding that it was corroborated by a witness, PTI reported.

The chargesheet alleged that Rajasekhar, "the mastermind and co-conspirator" behind the entire Rs 3,500 crore liquor scam, had influenced excise policy manipulation besides being instrumental in replacing automated OFS (order for supply) with manual process; to have planted loyalists in APSBCL (Andhra Pradesh State Beverages Corporation Limited). It further stated that he allegedly created shell distilleries and handed over "kickbacks" to Jagan through another accused Balaji Govindappa.

Rajasekhar routed as much as Rs 250-Rs 300 crore cash for elections on behalf of YSRCP Party in cooperation with accused former MLA Chevireddy Bhaskar Reddy, and was also responsible for laundering funds through over 30 shell firms. The amount was invested to acquire land, gold, luxury assets in Dubai and Africa, according to the charge sheet.

The police have alleged that the main accused played a pivotal role in introducing the new liquor policy under the previous YSRCP government, aiming to monopolize the supply and distribution of alcohol. According to investigators, this move was part of a larger scheme to secure commissions and kickbacks between 2019 and 2024.

"The accused planned the change in excise policy and also its modalities, to ensure that they would receive large kickbacks, major portion of such kickbacks was received in cash, gold bullion etc," the charge sheet claimed.

Moreover, PTI reported that during investigation, it was found that the accused intentionally withheld OFS approvals to brands and distilleries who did not yield to the kickback demands.

The Special Investigation Team (SIT) investigating the alleged liquor scam arrested YSRCP Lok Sabha member PV Midhun Reddy on Saturday. The Enforcement Directorate also filed a money laundering case to investigate the alleged liquor scam in May.

The central probe agency has filed an Enforcement Case Information Report (ECIR) under sections of the Prevention of Money Laundering Act (PMLA). 

From the investigation as of now, it was found that in the second half of year 2019, Sajjala Sridhar Reddy (A- 6) convened a meeting of the owners of the distilleries at Hotel Park Hyatt, Hyderabad, the charge sheet stated. The distilleries were told to work in tandem with the syndicate, it added. Under the fear of loss of business, many distilleries nodded to paying kickbacks at a 12 per cent rate. Later, the percentage was increased to 20 per cent of the base price, it further alleged.

"During the meeting, the owners were intimidated that if they do not accede to their proposals and no orders will be issued to them. Such intimidation for kickbacks by threatening them with no issuances of OFS and thereby receiving kickbacks amounts to extortion," the chargesheet alleged.

Slamming the government for the charge sheet, Jagan on X condemned the arrest of YSRCP Lok Sabha MP Sri P.V. Midhun Reddy. He added that Chief Minister N Chandrababu Naidu himself is on bail with respect to a case on issues pertaining to liquor policy during 2014 - 19, is an irrefutable evidence as to why he is stooping so low.

"The fact that he wants to nullify his case for acts during 2014-19 and also justify his policy now for 2024- 29, he is finding fault with the policy formulated by the YSRCP Government," he added.

By falsely accusing YSRCP leaders of a liquor scam, the current TDP-led coalition is reviving the very corrupt liquor practices that the previous YSRCP government had dismantled, YSRCP chief stated. “While undoing YSRCP government's successful deeds of shutting down thousands of such belt shops and permit rooms and also reducing the liquor outlets significantly, the present government is now encouraging permit rooms, belt shops, backdoor liquor sales beyond MRP and weakening regulatory enforcement.”