Vijayawada: The Enforcement Directorate (ED) on Monday questioned retired IAS officer K Dhanunjay Reddy and three others in connection with an alleged ₹3,500 crore liquor scam linked to the previous government in Andhra Pradesh.
The questioning took place at the ED office in Vijayawada as part of the agency’s ongoing investigation into alleged irregularities in the implementation of the state’s liquor policy between 2019 and 2024, during the tenure of the YSR Congress Party government led by former Chief Minister Y. S. Jagan Mohan Reddy.
Four Individuals Questioned by ED
Along with K Dhanunjay Reddy, the central agency also questioned three other individuals linked to the case:
• P Krishna Mohan Reddy, former Officer on Special Duty to then Chief Minister Y. S. Jagan Mohan Reddy
• Cherukuru Venkatesh Naidu, a close aide of former MLA Chevireddy Bhaskar Reddy
• Booneti Chanakya, a close relative of key accused Kesireddy Rajasekhar Reddy, also known as Raj Kesireddy
All four individuals appeared before ED officials for questioning as investigators continued to probe the alleged irregularities in the state’s liquor trade.
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Hours of Interrogation
According to officials familiar with the investigation, the accused were questioned for nearly two hours during the initial round of interrogation.
After the first round, Krishna Mohan Reddy reportedly left the ED office, while the remaining accused continued to face questioning until evening.
Investigators are examining their alleged roles in policy changes and financial transactions related to the liquor business during the previous government.
Allegations of Policy Manipulation
The ED is probing claims that the liquor policy was deliberately modified to favour certain manufacturers and suppliers.
According to investigators, the policy changes allegedly ensured that only those liquor manufacturers who paid substantial kickbacks were allowed to operate and secure supply contracts in the state.
The central agency’s preliminary assessment suggests that these irregularities resulted in losses of nearly ₹3,500 crore to the state exchequer.
Probe Into Money Trail and Shell Companies
Investigators are also examining allegations that kickbacks collected through the liquor trade were routed through a network of shell companies.
The ED is tracing the financial trail of the money, including how the funds were allegedly transferred into accounts linked to the accused individuals.
Officials are gathering details about the roles played by each suspect in diverting and laundering the funds.
ED Seeks Financial Documents
As part of the ongoing investigation, the ED has asked the accused to appear again with additional documents, including:
• Bank statements
• PAN card details
• Information related to assets owned by them and their family members
These documents are expected to help investigators establish the financial trail of alleged kickbacks.
Assets Worth ₹441 Crore Attached
In a major development earlier, the ED attached assets worth ₹441.61 crore belonging to key accused including Raj Kesireddy, Booneti Chanakya and former managing director of Andhra Pradesh State Beverages Corporation Limited, D Vasudeva Reddy.
The attachment was carried out under the provisions of the Prevention of Money Laundering Act, 2002.
According to the ED, the seized assets include bank balances, fixed deposits, land parcels and other immovable properties.
Money Trail of Over ₹1,048 Crore
The ED investigation has so far uncovered a money trail of ₹1,048.45 crore in alleged kickbacks.
Investigators claim that distilleries were compelled to pay bribes in multiple forms, including:
• Cash payments
• Gold
• Control and operational rights in certain distilleries
• Financial gains linked to liquor transportation
Authorities believe these payments were part of a larger liquor syndicate operating within the state’s liquor distribution system.
Case Originates From CID FIR
The ED began its investigation based on an FIR registered by the Crime Investigation Department (CID) of Andhra Pradesh Police.
The FIR invoked sections 120-B (criminal conspiracy), 409 (criminal breach of trust), and 420 (cheating) of the Indian Penal Code.
According to investigators, the alleged irregularities in liquor policy implementation caused massive financial losses to the government exchequer.
Investigation Continues
With multiple suspects under scrutiny and a complex financial trail under examination, the investigation into the alleged liquor policy scam is still ongoing.
The ED is expected to continue questioning key individuals and examining financial records to determine the extent of the alleged fraud and the role played by various officials and associates.
