Accused in Delhi excise policy case formed ‘super cartel’: ED charge sheet

ED also claimed that last year, when the file for Indo Spirit’s L1 licence was stuck due to a complaint, excise department officials worked till late at night to clear it after receiving a call from deputy chief minister Manish Sisodia’s office.

The Enforcement Directorate (ED), in its charge sheet in connection with a money laundering probe into alleged irregularities in Delhi’s 2021-22 excise policy, has claimed that businessman Sameer Mahendru, the owner of Indo Spirits, had formed a ‘super cartel’ with the alleged ‘South Group’ to control nine out of 32 retail zones in Delhi’s liquor business.

ED had conducted raids at businessman Sameer Mahendru’s house in September. (HT File)

Citing the statement of Dinesh Arora, an accused-turned-approver in the probe, the federal agency further claimed that last year, when the file for Indo Spirit’s L1 (wholesale) licence was stuck due to a complaint, excise department officials worked till late at night to clear it after receiving a call from deputy chief minister Manish Sisodia’s office.

Terming Aam Aadmi Party (AAP) communications in-charge Vijay Nair as the one who “orchestrated the entire scam”, the federal agency said Nair received advance kickbacks worth ₹100 crore from the alleged ‘South Group’, comprising Andhra Pradesh MP and YSR Congress leader Magunta Srinivasulu Reddy, his son Raghav Magunta, Telangana MLC and Bharat Rashtra Samithi leader Kalvakuntla Kavitha (the daughter of Telangana chief minister K Chandrasekhar Rao), and businessman Sarath Reddy (the promoter of Aurobindo Group).

All named as members of the alleged ‘South Group’ have earlier denied the charges against them. AAP didn’t comment to HT’s query till the time of filing this report, but has previously dismissed the probe into alleged irregularities in the excise policy as a politically motivated witch-hunt.

The ED charge sheet says, “Against the kickbacks paid, the South Group secured uninhibited access, undue favours, attained stakes in established wholesale business and multiple retail zones (over and above what was allowed in the policy). To recover the kickbacks given by the South Group, partners of South Group were given 65% stakes in Indo Spirits in collusion with Mahendru. This partnership formation was directed by Vijay Nair on the assurance of giving wholesale business of Pernod Ricard to Indo Spirits.”

It adds, “Pernod Ricard, one of the largest manufacturers in the country, made Indo Spirits its wholesaler-distributor as per the directions of Vijay Nair and AAP leaders, in exchange of ₹100 crore kickbacks to Nair, who has received advance kickbacks, and used to introduce himself as OSD (officer on special duty) to Excise Delhi, from the South Group, who are beneficial owners in Indo Spirits.”

“In this manner, the super cartel came into existence,” it adds.

About the matter of Indo Spirit’s L1 license, the charge sheet says, “...when the licence of Indo Spirits was stuck and the business commencement was near and Pernod Ricard was pressurizing to get licence, (business) Arun Pillai and Abhishek Boinpalli reached out to (Dinesh) Arora, who then communicated this to Vijay Nair, who then spoke to C Aravind, secretary to Manish Sisodia, who then sent necessary instructions to the excise department,” ED charge sheet says.

Excise officials, it adds, “worked till late at night to process this file and award the licence to Indo Spirits. This was corroborated by the statement of Narinder Singh, then assistant commissioner of excise department, who handled this file. The licence was granted on file around 10 pm on November 5, 2021.”

A Delhi court on Tuesday took cognizance of the ED prosecution complaint (also called charge sheet), filed last month against Mahendru and four companies linked to him. The federal agency also noted that Nair stayed near Delhi chief minister Arvind Kejriwal’s residence, insinuating the abatement of his actions in relation to the excise policy.

“Nair, who orchestrated this entire scam, is not an ordinary AAP worker but a close associate of Arvind Kejriwal (CM of Delhi). Nair, as per his statement under Section 50 of Prevention of Money Laundering Act, functions from the camp office of Arvind Kejriwal. Further, Nair, since 2020, has been residing in the government bungalow allotted to a cabinet minister of Delhi government -- Kailash Gehlot… These facts are relevant to mention so to establish the abatement of his actions in relation to the excise policy scam, by the political leaders of AAP,” the charge sheet says.

The federal agency said that Nair’s role in the excise policy is still being investigated, and a supplementary charge sheet would be filed against him. It has pegged the loss in entire scam to be worth ₹2,873 crore.

The Delhi government’s 2021-22 excise policy aimed to revitalize the city’s flagging liquor business. It aimed to replace a sales-volume based regime with a license fee one for traders, and promised swankier stores, free of the infamous metal grilles, ultimately giving customers a better buying experience. The policy also introduced discounts and offers on the purchase of liquor, a first for Delhi.

The plan, however, came to an abrupt end, with lieutenant governor Vinai Kumar Saxena recommending a CBI probe into alleged irregularities in the regime. This ultimately resulted in the policy being scrapped prematurely and being replaced by the 2020-21 regime, with the AAP alleging that Saxena’s predecessor sabotaged the move with a few last-minute changes that resulted in lower-than-expected revenues.