Andhra liquor scam: SIT says accused received kickbacks in cash, gold

Hyderabad: The Special Investigation Team (SIT) probing the alleged liquor scam during the YSRCP regime in Andhra Pradesh has found that distilleries and liquor suppliers paid bribes worth hundreds of crores to a liquor syndicate allegedly backed by top officials, not only in cash but also in gold.

According to the remand report submitted by the SIT to the court, which was seen by DH, liquor distilleries, companies, and suppliers employed several methods of cash generation and utilized bullion traders to pay bribes amounting to Rs 400 crore, including payments in gold. The CID SIT has estimated the total scam at approximately Rs 3,000 crore.

"To facilitate the payments of kickbacks and commissions, the distilleries and suppliers employed several methods of cash generation from funds credited by APSBCL to their accounts. They transferred funds to bullion traders and gold merchants, obtained legitimate GST invoices for gold purchases, and subsequently cash was transferred to Kessireddy Rajashekhar Reddy, Booneti Chanakya, or their associates by these gold merchants after deducting a commission. In certain cases, the distilleries or liquor suppliers would collude with gold merchants and supply gold directly to the accused. From the investigation done so far, several suspicious transactions worth nearly Rs 300-400 crore have been identified from bank statements of distilleries that show transactions with gold merchants" SIT said in the remand report of Chanakya, one of the accused.

The remand report seen by DH described Booneti Chanakya as a member of the syndicate and close associate of the key conspirator and kingpin, Kessireddy Raja Sekhar Reddy. Chanakya was instrumental in deliberately suppressing popular liquor brands and unlawfully issuing Orders for Supply (OFS) to favoured suppliers, thereby amassing illicit gains running into hundreds of crores of rupees.

One witness stated that Chanakya was involved in liquor sales through OFS issuance, settled kickback amounts on behalf of suppliers, contacted suppliers for kickbacks, and collected payments on behalf of the syndicate. He actively coordinated with distilleries and ensured timely payment of kickbacks to syndicate members.

Additionally, he analyzed monthly sales data and kickbacks paid by distilleries, and prepared indent plans in connivance with Raja Shekhar Reddy, who regularly directed top officials of the Andhra Pradesh Beverages Corporation Ltd (APBCL) regarding OFS placements to preferred companies. Several distillery owners and suppliers stated in their testimonies that Chanakya would demand kickbacks and threaten to withhold OFS if the demanded payments were not made.

The SIT report also revealed that a syndicate was formed comprising high-ranking officers, authorities in the political executive, their relatives, and business owners who controlled the manufacturing, wholesale, and retail of the liquor business within Andhra Pradesh in exchange for kickbacks, commissions, and bribes.

"Due to irregularities in payment discounts, intentionally not issuing indents to popular liquor brands, and other illegal acts, the syndicate caused huge wrongful loss to the government exchequer and to brands in high demand. These overtly criminal acts show that the syndicate members deliberately acted and continued to act for a period of five years with the help of public officials and higher political executives, establishing evidence of a larger conspiracy," said the report.

The SIT said that material available on record has prima facie established crimes under Sections 409, 420, 120(B), read with Sections 34 and 37 of the IPC, and Sections 7, 7A, 8, 13(1)(b), and 13(2) of the Prevention of Corruption Act, 1988.