The Enforcement Directorate (ED) has seized crucial evidence during nationwide searches connected to the Andhra Pradesh liquor scam, revealing a complex web of financial manipulation and illicit kickbacks. The agency’s investigation, initiated under the Prevention of Money Laundering Act (PMLA), uncovered bogus and inflated transactions used to generate and move illicit funds. On Thursday, the ED’s Hyderabad Zonal Office conducted raids at 20 locations across Hyderabad, Bengaluru, Chennai, Thanjavur, Surat, Raipur, Delhi NCR, and Andhra Pradesh. The searches targeted individuals and entities suspected of facilitating the payment of kickbacks.
Details of the Raids
Seizures: The raids led to the seizure of:
- Parallel invoices showing differential and inflated prices.
- Bogus invoices and transport challans.
- Digital chats implicating absconding accused persons believed to be in Dubai.
- Unaccounted cash totaling Rs 38 lakh.
- Ledgers detailing the remittance of several crores in Proceeds of Crime (POC) abroad.
Allegations and Investigation
The ED’s probe is based on a First Information Report (FIR) filed by the Andhra Pradesh CID, which estimates a loss of Rs 4,000 crore to the state exchequer. The case is also being investigated by a Special Investigation Team (SIT) constituted by the Andhra Pradesh government. The FIR alleges that under the state’s “new liquor policy” from October 2019 to March 2024, accused persons engaged in “brand killing and new brand promotion.” This involved sidelining established brands like McDowell’s and Royal Stag, which allegedly refused to pay kickbacks, in favor of new or spurious brands. The automated procurement system was also switched to a manual one, creating opportunities for manipulation.
The SIT has filed charge sheets alleging:
- Manipulation: The replacement of automated systems with manual approvals led to the manipulation of supply volumes and brand-wise orders.
- Favoritism: Select distilleries and marketing firms were favored.
- Extortion: Suppliers were coerced into paying kickbacks of 15–20 percent of their invoice value. Those who refused had their brands suppressed or delisted.
- Shell Companies: Shell distilleries were created to channel funds and secure inflated supply orders.
- Abuse of Power: Key officials allegedly facilitated brand approvals and manipulated eligibility norms.
Money Trail Uncovered
The ED’s money trail investigation revealed that payments made by the Andhra Pradesh State Beverages Corporation Limited (APSBCL) to suppliers were often transferred to shell entities or unrelated persons under the pretext of providing goods or services. In some cases, transactions were found to be heavily inflated. Funds were also funneled to jewelers to acquire gold or cash, which was then handed over to the accused as kickbacks. This scheme effectively used bogus and inflated transactions to siphon off funds, facilitating the movement of illicit money to the accused for personal benefits, election purposes, and foreign transfers.
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