K. Kavitha Faces Investigation in Connection to Delhi Liquor Scam

K. Kavitha, a Telangana MLC from Bharat Rashtra Samithi (BRS) and the daughter of Chief Minister K. Chandrashekar Rao, has been implicated in the Delhi liquor scam by investigative agencies. Kavitha arrived in Delhi yesterday, where she is expected to be questioned by the Enforcement Directorate (ED). She is among several politicians and businesspersons, including Delhi Deputy Chief Minister Manish Sisodia, who have been linked to the Delhi excise policy case.

The ED has requested to question her today, but she has asked for more time and requested to be questioned on March 11.

The allegation is that the Delhi government’s excise policy for 2021-22, which granted licenses to liquor traders, allowed for cartelization and favored certain dealers who allegedly paid bribes worth Rs 100 crore. This charge has been strongly refuted by the AAP. The policy was subsequently scrapped, and the Delhi LG recommended a CBI investigation, leading the ED to file a case against the accused under the PMLA.

Kavitha has denounced the investigation against her as political vendetta by the Centre. “These are tactics of intimidation,” she stated.

Here’s how the ED and the CBI link Kavitha to the Delhi liquor scam:

How it all started

Last year in December, Kavitha was requested by the CBI to appear before the agency as a witness, as she was believed to be familiar with the facts and circumstances of the case. However, during her appearance, the CBI interrogated her regarding her alleged connections with multiple arrested suspects, including P. Sarath Chandra Reddy from Aurobindo Pharma and Gurugram-based businessman Amit Arora, instead of treating her as a witness.

The ED had previously included Kavitha’s name in a remand report, alleging that she had acted on behalf of the “South Group” cartel to bribe AAP government officials and ministers in Delhi. Additionally, the CBI inquired about Kavitha’s reasons for changing her cell phone devices seven times recently, four times on one number and three times on other cell numbers.

Currently, Kavitha has been summoned by the Enforcement Directorate (ED) in Delhi for her alleged involvement in the Delhi liquor scam. Kavitha, who is an MLC of the Bharat Rashtra Samithi (BRS) party in Telangana and also happens to be the daughter of Chief Minister K. Chandrashekar Rao, has been accused of being linked to the scam along with several other politicians and businesspersons. One of these politicians is Delhi Deputy Chief Minister Manish Sisodia.

The Delhi excise policy case, which involved granting licenses to liquor traders, was marred with allegations of bribery and cartelization. The ED has booked a case against the accused under the PMLA after the policy was scrapped, and the Delhi Lieutenant Governor recommended a CBI probe. Kavitha has claimed that the probe against her is an act of political vendetta by the Centre and has termed it as a tactic of intimidation. The ED has summoned her for questioning, but Kavitha has sought more time and requested to be questioned on March 11.

Why the ED wants to quiz Kavitha

Kavitha is being questioned by the ED due to the recent arrest of Arun Ramachandran Pillai, a businessman from Hyderabad. The agency has called Kavitha to be confronted with Pillai, who is alleged to be a frontman of the South Group. This liquor cartel is believed to have influenced the wording of the excise policy. Pillai, who has admitted to representing Kavitha’s interests, will remain in ED custody until March 13.

Who is Arun Ramachandra Pillai?

According to the ED, Arun Ramchandran Pillai, who is considered a key conspirator and frontman for Kavitha, has allegedly “connived” to channelize payoffs of Rs 100 crore to AAP functionaries. The ED alleges that Pillai not only represented Kavitha but also acted on her instructions. In its remand report filed in the Rouse Avenue court in Delhi, the ED has stated that Pillai is one of the key persons involved in the Delhi excise scam, which involves huge kickbacks and the formation of the biggest cartel of the ‘South Group’. The South Group includes Kavitha, YSRC Ongole MP Magunta Srinivasulu Reddy, his son Raghava Magunta, and P Sarath Chandra Reddy of Aurobindo Pharma.

The ED claims that Pillai, along with his associates, was coordinating with various persons to execute the political understanding between the South Group and leaders of Aam Aadmi Party. Pillai allegedly had a shareholding of 32.5% in Indospirit, which got an L1 license. Prem Rahul (32.5%) and Indospirit Distribution Limited (35%) are the other partners. Pillai and Prem Rahul represented the benami investments of Kavitha, Magunta, and his son Raghava. Pillai, along with his associates, allegedly orchestrated the entire scheme of forming a cartel of manufacturers, wholesalers, and retailers, which controlled more than 30% of the wholesale liquor business in Delhi.

The ED alleges that in exchange for kickbacks from the South Group to Vijay Nair (AAP communication in-charge) and AAP, Indospirit was made the wholesaler of Pernod Ricard, a global wine and spirits company. Indospirit was allegedly a special purpose vehicle to recoup kickbacks paid by the South Group and channel the illegal gains.

The ED further alleges that Pillai was involved in the excise policy formulation, gave inputs to Vijay Nair, and had been part of discussions where Nair proposed favors in the policy. Pillai had conspired with other persons, actively connived in the cartel formation, and was an accomplice in the Rs 100 crore kickbacks from the South Group to AAP, the ED claims.

The alleged link of Kavitha’s former CA Butchibabu Gorantla

A Hyderabad-based chartered accountant, Butchibabu Gorantla, was arrested in February by the CBI for his supposed involvement in the formulation and execution of the now defunct Delhi excise policy. Butchibabu is believed to have been an ex-aide of Kavitha. The CBI has accused him of acting on behalf of the South Group, purportedly led by Kavitha, YSRC Ongole MP Magunta Srinivasulu Reddy, and P. Sarath Chandra Reddy, a promoter of Aurobindo Pharma. Sarath Chandra has already been apprehended in the case, while the MP’s son was detained in February. Butchibabu was granted bail on Monday, with the court stating that he was not connected to any of the credit notes granted by wholesalers in favor of retailers nor had he met Manish Sisodia or any other public official.

According to the ED, “Sarath Reddy brought Butchibabu on board to guide him with finance and market analysis as he was good with numbers. They all met at Kavitha’s house on Road Number 14, Banjara Hills.” The CBI and ED have also alleged that businessman Abhishek Boinpally and Butchibabu were partners of Pillai and had attended several meetings with another defendant, Sameer Mahendru, the MD of Indospirit. Additionally, the probe agencies have claimed that Vijay Nair, the AAP communication in-charge, was introduced to Butchi Babu and informed that the latter was closely linked with Kavitha and Magunta.