Andhra Pradesh Liquor Scam: Enforcement Directorate Raids Multiple States in ₹3,500 Crore Probe
Hyderabad/Amaravati, September 18, 2025 – The Enforcement Directorate (ED) launched a series of high-profile raids across multiple states on Thursday, targeting an alleged ₹3,500 crore liquor scam in Andhra Pradesh linked to the previous YSR Congress Party (YSRCP) government. The operation, conducted under the Prevention of Money Laundering Act (PMLA), covered approximately 20 locations in Telangana, Andhra Pradesh, Tamil Nadu, Karnataka, Delhi-NCR, and reportedly one additional state, focusing on entities and individuals accused of facilitating massive kickbacks through fraudulent financial networks. The raids mark a significant escalation in the investigation into one of the largest financial scandals in the state’s history, which allegedly siphoned off billions from the state’s liquor trade between 2019 and 2024.
Scope and Scale of the Raids
The ED’s Hyderabad unit spearheaded the coordinated searches, targeting premises linked to several entities, including Arete Institute of Medical Sciences, Shree Jewellers Eximp, N.R. Udhyog LLP, The India Fruits Pvt. Ltd. (Chennai), Venkateshwara Packaging, Suvarna Durga Bottles, Rao Saheb Boorugu Mahadev Jewellers, Ushodaya Enterprises, and Mohan Lal Jewellers (Chennai). These entities are suspected of acting as conduits for laundering illicit funds through bogus and inflated invoices. According to ED officials, the raids aimed to uncover documents, digital records, and financial evidence to trace the flow of an estimated ₹3,500 crore allegedly diverted through a complex web of benami firms, shell companies, and hawala channels.
The operation follows a Special Investigation Team (SIT) probe by the Andhra Pradesh Police, which filed three chargesheets alleging that 16 liquor companies paid bribes totaling ₹1,677 crore to secure supply orders worth ₹10,835 crore from the Andhra Pradesh State Beverages Corporation Limited (APSBCL) during the YSRCP’s tenure from 2019 to 2024. The SIT’s findings indicate that over 90% of the ₹23,000 crore in supply orders issued by APSBCL went to just 40 of the 111 registered liquor companies, raising red flags about favoritism and corruption.
Allegations and Key Figures
The scandal centers on allegations that a syndicate, allegedly orchestrated by key figures within the YSRCP government, collected monthly kickbacks ranging from ₹50 to ₹60 crore. The SIT chargesheet claims that former Chief Minister Y.S. Jagan Mohan Reddy chaired a July 2019 meeting where the controversial liquor policy was finalized, granting APSBCL control over retail outlets. While Jagan has not been named as an accused, the chargesheet alleges he was among the beneficiaries of the kickbacks, a claim the YSRCP has vehemently denied, calling it a “political conspiracy” and “witch hunt” by the current TDP-led government.
Among the prominent figures arrested is YSRCP Lok Sabha MP P.V. Midhun Reddy, apprehended on July 19, 2025, for allegedly conspiring with co-accused to divert distillery funds. Midhun Reddy was granted interim bail on September 6, prompting former CM Jagan to condemn the arrest as a “targeted act of political vendetta.” Another key accused, Kesireddy Rajasekhar Reddy, a former IT advisor to Jagan, is in judicial custody, with the ED having recorded statements from several distilleries linked to him. The agency alleges that Rajasekhar Reddy and Midhun Reddy funneled money through over 30 shell companies, investing in land, gold, and luxury assets in Dubai and Africa.
The SIT also arrested three individuals—Dhanunjaya Reddy, Krishna Mohan Reddy, and Balaji Govindappa—in May 2025, though they were granted bail on September 7. YSRCP leader Ambati Rambabu alleged that their release was deliberately delayed by hours on the orders of Chief Minister N. Chandrababu Naidu and IT Minister Nara Lokesh, citing political motives.
Modus Operandi of the Scam
Investigators allege that the scam involved a sophisticated network where distilleries, after receiving payments from APSBCL, diverted large sums under the guise of raw material purchases and brand promotions. These funds were allegedly withdrawn in cash and paid out as kickbacks to influential figures. The SIT claims that only distillers and companies willing to pay commissions were awarded purchase orders, sidelining popular brands in favor of obscure ones. Illicit proceeds were reportedly laundered through low-profile employees, such as office boys, who received funds as “salaries” before transferring them to shell accounts, bullion, or overseas assets.
Former Special Chief Secretary for Excise Rajat Bhargava reportedly warned the Chief Minister’s Office about irregularities in the liquor policy but was ignored. Additionally, the appointment of D. Vasudeva Reddy, an IRTS officer, as APSBCL’s Managing Director, allegedly with Jagan’s backing, has come under scrutiny, with police claiming it facilitated the scam.
ED’s Ongoing Investigation
The ED’s raids are a critical step in dismantling the alleged nexus behind the scam. The agency has been actively tracing the money trail, summoning representatives from accused firms and questioning individuals involved. On September 18, a special court in Vijayawada extended the judicial remand of eight accused until September 26, signaling the probe’s intensity. The ED is also investigating the diversion of funds to international destinations, with evidence suggesting investments in luxury assets abroad.
An ED official, speaking anonymously, described the searches as “a critical step in dismantling the nexus behind this multi-crore fraud,” emphasizing the agency’s commitment to recovering laundered assets. The raids targeted middlemen and shell companies used to launder bribes, with no politicians directly covered in Thursday’s operations, according to sources.
Political and Public Reactions
The raids have intensified political tensions in Andhra Pradesh. The YSRCP has dismissed the allegations as “baseless,” accusing the TDP-led government of using the investigation to settle political scores. Jagan’s public statement on X, condemning Midhun Reddy’s arrest, has fueled debates about the probe’s impartiality. Meanwhile, political opponents argue that the ED’s actions highlight the need for accountability in the state’s lucrative liquor trade, which generates billions in revenue.
Public reaction on social media platforms like X has been mixed, with some praising the ED for cracking down on corruption, while others view the raids as politically motivated. The scale of the alleged scam has sparked outrage among citizens, with calls for stricter oversight of state-run enterprises like APSBCL.
Broader Implications
The Andhra Pradesh liquor scam probe underscores the challenges of regulating the liquor trade, a major revenue source for states but often plagued by allegations of graft. The ED’s multi-state operation highlights the scam’s far-reaching financial networks, potentially implicating corporate and political figures across India. As the investigation unfolds, it could lead to further arrests, asset seizures, and revelations about the misuse of public funds.
With the ED continuing to gather evidence and the political battle heating up, the Andhra Pradesh liquor scam is poised to remain a focal point of national attention, raising questions about governance, transparency, and the integrity of state-controlled enterprises. The outcome of this probe could have significant implications for Andhra Pradesh’s political landscape and India’s broader fight against financial crimes.
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