Delhi lost ₹2,873 crore due to excise policy loopholes: ED to city court
The agency made the claims during a remand application for to seek the custody of businessman Amit Arora, who was arrested on Tuesday.
Loopholes in Delhi’s now-scrapped excise policy that was put in place last year led to a loss of ₹2,873 crore, the Enforcement Directorate alleged in a city court on Wednesday, escalating the controversy between the central government and the Capital’s elected administration under the Aam Aadmi Party (AAP).
The agency made the claims during a remand application for to seek the custody of businessman Amit Arora, who was arrested on Tuesday. In it, the agency cited purported losses on account of surrendered licenses and because vends did not open in certain wards that were classified as non-conforming areas (mostly consisting of unauthorised markets).
Representatives of AAP and the Delhi government did not respond to requests for a comment but the administration and party has denied the charges as lies and part of a ploy by the opposition Bharatiya Janata Party to destabilise the government.
In its remand application related to Arora, the agency made claims concerning AAP member and co-accused Vijay Nair.
“Vijay Nair is not an ordinary worker of the AAP but a close associate of Arvind Kejriwal, the CM of Delhi… Further, Nair, since 2020, has been residing in the government bungalow allotted to a cabinet minister of Delhi government…Nair, does not have any other residence in Delhi, the irony being that (city minister Kailash) Gahlot lives at another private residence in Najafgarh,” the agency said.
The agency claimed Nair, in “conspiracy and collusion” with businessmen and co-accused Dinesh and Amit Arora, “arm twisted few wholesalers to surrender their L1 licenses and then coerced manufacturers to choose the wholesalers of his choice and to direct the profit margins to persons of their choice (who were agreeable to fulfilling the kickback demands)”.
This is the first time allegations of such nature are being made and any probe agency has offered a figure for the alleged losses.
The agency has also said the policy went against the suggestion of an expert committee that sent its recommendations to a Group of Ministers (GoM) comprising ministers Manish Sisodia, Satyendar Jain and Gahlot, and that public opinion was not sought, which suggested there was “malafide intention and conspiracy”.
To be sure, a government is not bound by the recommendations of an expert committee.
With respect to Amit Arora, who was sent to seven days police custody, the agency alleged he was one of the key people along with Dinesh Arora who actively assisted Nair.
Amit Arora’s counsel Ajit Kumar Singh opposed the remand application saying that his client has co-operated in the investigation and has appeared before the agency 22 times for questioning.
The agency contended that the loss was illegally diverted into ostentatious profits to wholesalers, which was used to recoup the kickbacks paid in advance by an entity called the South group.
ED has referred to the ‘South Group’ as a set of individuals who paid kickbacks to Nair. It is, according to ED, “controlled by Sarath Reddy, K Kavitha and Magunta Srinivasulu Reddy.
The controversy relating to the excise scam came into view this July, when the lieutenant governor ordered an investigation by the Central Bureau of Investigation, citing a report from the chief secretary who at the time said there were prime facie irregularities.
The policy was meant to overhaul the city’s liquor business, which included the government exiting the sector and allowing market forces to determine the trade in the hopes that it would make the experience better for customers and expecting competition to drive down prices.