ED questions ex-IAS officer K Dhanunjay Reddy and three others in Vijayawada over the alleged ₹3,500 crore Andhra Pradesh liquor scam. Investigators probe policy manipulation, kickbacks, and money laundering through shell companies.
The Enforcement Directorate (ED) on Monday interrogated retired IAS officer K Dhanunjay Reddy along with three other individuals in connection with the alleged ₹3,500 crore liquor scam linked to the previous government in Andhra Pradesh.
The questioning was conducted at the ED office in Vijayawada as part of the agency’s ongoing investigation into suspected 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
In addition to K Dhanunjay Reddy, the ED questioned three other individuals associated with the case:
P Krishna Mohan Reddy, former Officer on Special Duty (OSD) to then Chief Minister Y. S. Jagan Mohan Reddy
Cherukuru Venkatesh Naidu, a close aide of former MLA Chevireddy Bhaskar Reddy
Booneti Chanakya, a relative of key accused Kesireddy Rajasekhar Reddy (Raj Kesireddy)
All four appeared before ED officials for interrogation. According to sources, the initial round of questioning lasted nearly two hours. While Krishna Mohan Reddy left the ED office after the first session, the remaining accused continued to face questioning until evening. Investigators are examining their alleged roles in policy changes and financial transactions linked to the liquor trade during the previous government’s tenure.
Allegations of Policy Manipulation
The ED is probing allegations that the state’s liquor policy was deliberately altered to benefit select manufacturers and suppliers. Investigators suspect that only those manufacturers who paid substantial kickbacks were permitted to operate and secure supply contracts. Preliminary findings suggest that these irregularities caused losses of nearly ₹3,500 crore to the state exchequer.
Probe Into Money Trail and Shell Companies
Investigators are also examining claims that bribes collected through the liquor trade were routed via a network of shell companies. The ED is tracing the financial trail to determine how funds were allegedly diverted into accounts linked to the accused individuals.
The agency has directed the suspects to submit additional documents, including:
Bank statements
PAN card details
Information on assets owned by them and their family members
These records are expected to help establish the money trail and confirm the extent of financial irregularities.
Assets Worth ₹441 Crore Attached
In a significant 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 Prevention of Money Laundering Act (PMLA), 2002).
The seized assets include bank balances, fixed deposits, land parcels, and other immovable properties.
Money Trail of Over ₹1,048 Crore
So far, the ED has 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 distilleries
Financial gains linked to liquor transportation
Authorities believe these payments were part of a larger liquor syndicate operating within the state’s distribution system.
Case Origin and Legal Framework
The ED’s investigation stems from an FIR registered by the Crime Investigation Department (CID) of Andhra Pradesh Police, which invoked sections 120-B (criminal conspiracy), 409 (criminal breach of trust), and 420 (cheating) of the Indian Penal Code (IPC).
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 ED’s probe into the Andhra Pradesh liquor scam remains ongoing. The agency is expected to continue questioning key individuals, examining financial records, and tracing the flow of funds to determine the full extent of the alleged fraud and the roles played by various officials and associates.
