E-Paper
ED questions ex-IAS officer, 3 others in AP liquor fraud case
The ED questioned retired IAS officer K Dhanunjay Reddy and three others in a ₹3,500 crore liquor scam linked to Andhra Pradesh's former government.
The Enforcement Directorate (ED) on Monday questioned retired IAS officer K Dhanunjay Reddy and three others in connection with the ₹3,500 crore liquor scam that allegedly took place during the previous government in Andhra Pradesh under the YSR Congress party between 2019 and 2024, people familiar with the development said.
Apart from Dhanunjay Reddy, who had served as additional secretary in the chief minister’s office, the ED questioned P Krishna Mohan Reddy, who was 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 Redddy and Booneti Chanakya, a close relative of accused no. 1 in the case Kesireddy Rajasekhar Reddy alias Raj Kesireddy.
The four accused appeared before ED officials in Vijayawada as part of the ongoing probe into alleged irregularities in the state’s liquor policy during the previous government.
An official familiar with the matter said the ED authorities questioned the accused for nearly two hours. After the initial round of interrogation, Krishna Mohan Reddy left the ED office, while the remaining accused continued to be questioned by investigators till evening.
The central agency is probing alleged large-scale irregularities in the implementation of the liquor policy under the previous regime. According to the ED’s preliminary assessment, the alleged irregularities in the liquor trade caused a loss of nearly ₹3,500 crore to the state exchequer.
During the questioning,according to the official, ED officials sought explanations from the accused regarding the drastic changes made to the liquor policy at the time. Investigators are examining allegations that the policy was altered in such a way that only liquor manufacturers who paid hefty kickbacks were allowed to operate and secure supply contracts.
The ED is also investigating allegations that the kickbacks collected through the liquor trade were routed through a network of shell companies before being transferred into the accounts of the accused. Officials are gathering details about the financial trail and the role played by each of the suspects in allegedly diverting the funds.
As part of the ongoing investigation, the ED has directed the accused to appear for further questioning with additional documents, including their bank statements, PAN card details and information relating to the assets held by their family members.
In connection with the liquor scam case, the ED on Friday attached assets worth more than ₹441.61 crore belonging to key accused Raj Kesireddy, Chanakya and former AP State Beverages Corporation Ltd (APSBCL) managing director D Vasudeva Reddy as part of its money-laundering probe.
The investigation into the financial transactions and alleged irregularities in the liquor policy is still underway.
“The attachment was made under the provisions of Prevention of Money Laundering Act (PMLA), 2002 in the liquor scam. The attached properties are in the form of bank balances, fixed deposits, land parcels and other immovable properties,” the ED release said.
It said the agency had initiated investigation on the basis of FIR registered by Crime Investigation Department of the state police under sections 120-B, 409 & 420 of Indian Penal Code for causing a loss to the government exchequer to the tune of ₹3,500 crore.
The ED investigation has so far revealed a money trail of ₹1048.45 crore in the form of kickbacks which several distilleries were compelled to pay in the form of cash, gold, etc. as well as in the form of control & operation of some distilleries by the liquor syndicate and also in the form of financial gains derived from transport of liquor.
