Another SIT charge sheet alleges ex-CM Jagan’s link to liquor case

The SIT is probing the ₹3,500 crore liquor case that reportedly took place during Jagan mohan Reddy’s tenure

The special investigation team (SIT) of the Andhra Pradesh police probing the ₹3,500 crore liquor case that allegedly took place during the previous YSR Congress Party (YSRCP) regime between 2019 and 2024, said all key decisions with regard to the change of excise policy were taken by key functionaries in the government with total approval from then chief minister YS Jagan Mohan Reddy.

On June 21, 2019, Jagan had granted his approval for the interim arrangement by extending the license period of liquor shops till September 30 (PTI)

In the 124-page supplementary charge sheet filed before the Anti-Corruption Bureau (ACB) court in Vijayawada on Monday, the SIT explained in detail, quoting relevant note files, how the former chief minister had taken specific decisions to turn the liquor trade into a royal route for illegal earnings, and how appointments were made in violation of senior officials’ recommendations.

For example, on June 21, 2019, Jagan had granted his approval for the interim arrangement by extending the license period of liquor shops till September 30 and further directed that all arrangements be made for identifying the personnel for managing the shops as they will be run as government shops from October 1, 2019.

The charge sheet also mentioned that it was the then chief minister who, at a meeting on July 29, 2019, finalised the matters relating to number of shops, hiring of shop premises, shop infrastructure, manpower transportation chargers, etc.

HT has seen the copy of the charge sheet. The first charge sheet was filed by the SIT on July 19.

According to the SIT, a key aspect of this case was the way certain policies were arbitrarily altered to keep the entire liquor business under the control of officials who are now accused in the case. The SIT has levelled charges against the former CMO secretary and retired IAS officer Kalva Dhanunjaya Reddy (A-31), Jagan’s OSD Pellakuru Krishnamohana Reddy (A-32), and Bharathi Cements director Govindappa Balaji (A-33) for their involvement and role.

The charge sheet also referred to the files pertaining to appointment of D Vasudeva Reddy (A-2) as the managing director of AP State Beverages Corporation Limited (APSBCL) to influence the system to suit the needs of the top people in the government.

It said former principal advisor to then chief minister Ajeya Kallam proposed bringing Vasudeva Reddy on deputation from the railways and Jagan approved the file. Though then chief secretary L V Subrahmanyam recommended that Vasudeva Reddy be appointed as MD of the Safe Drinking Water Supply Corporation, Jagan decided to appoint him as APSBCL MD. The charge sheet notes that no reasons were recorded for bringing him into a cadre post.

It further said following Ajeya Kallam’s recommendations, he was also appointed as commissioner of distilleries and breweries. Later, D Satya Prasad (A-3) was appointed as special officer of the APSBCL, based on a recommendation letter from Ajeya Kallam to the Special Chief Secretary (Revenue).

The charge sheet said during the course of investigation, the SIT uncovered several internal documents that point out that the illegalities being committed in APSBCL, specifically with regard to the issuance of OFS (order for supply) to the distilleries and suppliers and maintenance of records with the knowledge of the higher authorities in the government but no action was taken against Satya Prasad and Vasudeva Reddy.

Though the irregularities were identified as early as 2020, no corrective steps were taken. The then special chief secretary (revenue) Rajat Bhargava told the SIT that CMO officials A Dhanunjaya Reddy and P Krishnamohana Reddy pressured him not to take any action against Vasudeva Reddy and Satya Prasad.

Even when memos were issued to the two officers, they neither responded nor explained, instead pressuring Bhargava to ratify their actions and issue backdated orders. Despite senior officials knowing of these irregularities by 2022, no action was taken.

The charge sheet also referred to a criminal conspiracy hatched to regularise the serious misdeeds carried out by the accused with respect to the issuance of OFS to the distilleries and suppliers. The SIT obtained electronic evidence about the meeting of former IT advisor to the Jagan government Raj Kesireddy (who is A-1 in the case) with Satya Prasad, Vasudeva Reddy, then intelligence chief P S R Anjaneyulu, Dhanunjay Reddy, Krishna Mohan Reddy and others on November 2, 2023 at Vaddeshwaram.

“During the meeting, the irregularities in files and annexures relating to OFS were discussed and a decision was taken to manipulate the old records, destroy them and replace the note files pertaining to OFS with manipulated records. It was also decided to take signatures of Rajat Bhargava and Vivek Yadav (commissioner of prohibition and excise) on the manipulated note files to ratify the same,” the charge sheet said.

The charge sheet also includes details of hawala transactions, fake directors linked to shell companies, and other related matters. It concludes that this financial crime, valued at ₹3,500 crore, was a premeditated and strategic misuse of public funds, with deep-rooted networks. The charge sheet also mentioned how low level employees were used to launder the illegal earning from liquor.

Officials quoting the charge sheet said during investigation it was revealed that the accused have “systematically” laundered the kickback amount with the help of low-profile individuals who worked as office boys or employees in the companies owned by the accused. “Such employees and individuals acted as couriers and mules for depositing illicit cash into a network of bank accounts linked to the syndicate,” the charge sheet said.

This pattern of cash layering and circulation demonstrates a deliberate attempt to conceal the origin of crime proceeds, constituting a classic case of structured money laundering and concealment under the garb of petty deposits, it said.

A portion of the liquor kickbacks was transferred to the employees and associates of the accused as salary, they further said adding it was also observed that several of such low-profile individuals were made to send the cash deposited into their account to other accused.

When contacted, former minister and senior YSRCP leader Ambati Rambabu told PTI that all allegations made in the chargesheets are baseless and “created” ones.

(With PTI inputs)