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Delhi 'Liquor Scam': How is Telangana Leader K Kavitha Linked to the Case?

K Kavitha was arrested by the ED on 15 March in a money-laundering case related to the Delhi excise policy case.

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Bharat Rashtra Samithi (BRS) MLC K Kavitha, the daughter of party president and former Telangana Chief Minister K Chandrasekhar Rao, was arrested on Friday, 15 March, in a money-laundering case related to the Delhi excise policy case after searches at her residence in Hyderabad, the Enforcement Directorate (ED) said.

Kavitha was arrested even as her petition in the Supreme Court seeking orders to restrain the ED from arresting her in the case was to come up for hearing on 19 March. Earlier in February, the apex court had extended protection to Kavitha from action by the ED till 13 March.
K Kavitha was arrested by the ED on 15 March in a money-laundering case related to the Delhi excise policy case.

BRS leader K Kavitha being arrested by the Enforcement Directorate (ED) from her Hyderabad residence in connection with the Delhi excise policy-linked money laundering case.

(Photo: PTI)

The ED had questioned Kavitha, a former MP, earlier. However, she has not appeared before the agency since October last year despite summons.

In February 2023, the ED had filed a second charge sheet in connection with their investigation into the Delhi excise policy (2021-22) case and Kavitha's alleged role was elaborately discussed in the legal document.

What's she accused of? We explain.

Delhi 'Liquor Scam': How is Telangana Leader K Kavitha Linked to the Case?

  1. 1. In a Nutshell

    Kavitha and three others – YSR Congress Party MP Magunta Srinivasulu Reddy, Raghav Magunta, and Sharath Reddy who form what the ED has called, 'South Group' – are accused of paying, through proxies, Rs 100 crore to Vijay Nair, Aam Aadmi Party (AAP) communication head and alleged proxy for Delhi Deputy CM Manish Sisodia.

    According to the charge sheet, the bribe was allegedly paid to run wholesale liquor business in Delhi, through proxies, to reap huge profits made feasible by the AAP government's excise policy of 2021-22, the content of which was leaked to select businesses even before it was passed by a Group of Ministers (GoM).

    K Kavitha was arrested by the ED on 15 March in a money-laundering case related to the Delhi excise policy case.

    K Kavitha, daughter of Telangana Chief Minister K Chandrasekhar Rao.

    (Photo: Accessed by The Quint)

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  2. 2. How Did the Alleged Scam Work?

    The Delhi liquor policy 2021-22 allowed each wholesaler to reap at least 12 percent and each retailer 185 percent in profits. The policy, which mandated that each manufacturer should do business with just one wholesaler at a time, allowed formation of a money laundering, manufacturer-wholesaler run, liquor cartel, the ED has accused.

    According to the ED, Delhi liquor business was rigged by the AAP government which allegedly favoured some liquor businesses over others in exchange of kickbacks.

    Expand
  3. 3. How Does Kavitha Figure in This?

    According to the ED, Kavitha allegedly had indirect stake in Indo Spirits, a Delhi-based liquor wholesaler, whose owner Sameer Mahandru is an accused in the case. The South Group, which included Kavitha, allegedly had about 65 percent stake in Indo Spirits, through proxies including Kavitha's alleged associate and Hyderabad businessman Arun Pillai.

    Indo Spirits then got the business of Pernod Picard India, the biggest liquor manufacturer in India. This deal was allegedly facilitated by Vijay Nair, who was paid Rs 100 crore which was "channeled illegally" to AAP leaders, the charge sheet claimed. The profits obtained by this manufacturer-wholesaler nexus was then used to cover the bribe allegedly paid by South Group to the AAP.

    According to the ED, apart from 65 percent stake in Indo Spirits, the South Group also had control over nine liquor retail zones, thereby allowing them to control 30 percent of Delhi's liquor market.
    Expand
  4. 4. What is the Evidence Against Kavitha?

    The ED's case is lean when it comes to evidence, as allegations against Kavitha are based on confession statements made by three accused in the case:

    1. Sameer Mahandur, owner of Indo Spirits, who claimed to have given 65 percent stake in his company to South Group.

    2. Dinesh Arora, Delhi businessman who claimed to have been an associate of AAP's Sunil Nair.

    3. Arun Pillai, Hyderabad businessman who claimed to have been Kavitha's associate.

    (At The Quint, we are answerable only to our audience. Play an active role in shaping our journalism by becoming a member. Because the truth is worth it.)

    Expand

In a Nutshell

Kavitha and three others – YSR Congress Party MP Magunta Srinivasulu Reddy, Raghav Magunta, and Sharath Reddy who form what the ED has called, 'South Group' – are accused of paying, through proxies, Rs 100 crore to Vijay Nair, Aam Aadmi Party (AAP) communication head and alleged proxy for Delhi Deputy CM Manish Sisodia.

According to the charge sheet, the bribe was allegedly paid to run wholesale liquor business in Delhi, through proxies, to reap huge profits made feasible by the AAP government's excise policy of 2021-22, the content of which was leaked to select businesses even before it was passed by a Group of Ministers (GoM).

K Kavitha was arrested by the ED on 15 March in a money-laundering case related to the Delhi excise policy case.

K Kavitha, daughter of Telangana Chief Minister K Chandrasekhar Rao.

(Photo: Accessed by The Quint)

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How Did the Alleged Scam Work?

The Delhi liquor policy 2021-22 allowed each wholesaler to reap at least 12 percent and each retailer 185 percent in profits. The policy, which mandated that each manufacturer should do business with just one wholesaler at a time, allowed formation of a money laundering, manufacturer-wholesaler run, liquor cartel, the ED has accused.

According to the ED, Delhi liquor business was rigged by the AAP government which allegedly favoured some liquor businesses over others in exchange of kickbacks.

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How Does Kavitha Figure in This?

According to the ED, Kavitha allegedly had indirect stake in Indo Spirits, a Delhi-based liquor wholesaler, whose owner Sameer Mahandru is an accused in the case. The South Group, which included Kavitha, allegedly had about 65 percent stake in Indo Spirits, through proxies including Kavitha's alleged associate and Hyderabad businessman Arun Pillai.

Indo Spirits then got the business of Pernod Picard India, the biggest liquor manufacturer in India. This deal was allegedly facilitated by Vijay Nair, who was paid Rs 100 crore which was "channeled illegally" to AAP leaders, the charge sheet claimed. The profits obtained by this manufacturer-wholesaler nexus was then used to cover the bribe allegedly paid by South Group to the AAP.

According to the ED, apart from 65 percent stake in Indo Spirits, the South Group also had control over nine liquor retail zones, thereby allowing them to control 30 percent of Delhi's liquor market.
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What is the Evidence Against Kavitha?

The ED's case is lean when it comes to evidence, as allegations against Kavitha are based on confession statements made by three accused in the case:

  1. Sameer Mahandur, owner of Indo Spirits, who claimed to have given 65 percent stake in his company to South Group.

  2. Dinesh Arora, Delhi businessman who claimed to have been an associate of AAP's Sunil Nair.

  3. Arun Pillai, Hyderabad businessman who claimed to have been Kavitha's associate.

(At The Quint, we are answerable only to our audience. Play an active role in shaping our journalism by becoming a member. Because the truth is worth it.)

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