The Directorate of Enforcement (ED), Hyderabad Zonal Office, carried out search operations on Thursday at twenty locations across Hyderabad, Bengaluru, Chennai, Thanjavur, Surat, Raipur, Delhi NCR and Andhra Pradesh in connection with the Andhra Pradesh liquor scam.
The searches were conducted under the Prevention of Money Laundering Act (PMLA), 2002, targeting entities and individuals suspected of facilitating kickbacks through bogus and inflated transactions.
The searches resulted in the seizure of incriminating evidence, including bogus invoices, transport challans with non-transport vehicle details, parallel invoices showing inflated prices, and digital chats implicating accused individuals believed to be absconding in Dubai.
Ledgers indicating the remittance of proceeds of crime worth several crores abroad were seized, along with unaccounted cash of ₹38 lakh.
The ED launched its probe on the basis of an FIR registered by the Andhra Pradesh Crime Investigation Department (CID), which estimated losses to the State exchequer of around ₹4,000 crore.
On February 5, 2025, the State government constituted a Special Investigation Team (SIT) to investigate the case.
The FIR alleged that between October 2019 and March 2024, under the ‘new liquor policy’, accused persons sidelined popular liquor brands such as McDowell’s, Royal Stag and Imperial Blue, which refused to pay kickbacks. In their place, lesser-known or spurious brands were promoted in return for huge payments from distilleries and suppliers. The procurement system was shifted from automated to manual approvals, opening the door for manipulation in Order for Supply (OFS).
The SIT filed a chargesheet and supplementary chargesheets alleging that the accused replaced automated systems with manual approvals to manipulate supply volumes, favoured select distilleries, coerced suppliers into paying 15 to 20% of their invoice value as kickbacks, and created shell distilleries to channel funds.
The chargesheets also alleged that key officials were appointed to manipulate eligibility norms, suppress dissenting suppliers, and ensure brand approvals that benefited favoured companies.
Kickbacks were allegedly routed through procurement manipulation, fake vendor payments and shell companies, with funds used for elections, personal gain and overseas transfers.
The ED investigation found that certain accused deliberately withheld payments to established distilleries, discouraged orders for popular brands and demanded illicit payments in exchange for OFS approvals. Tracing the money trail, officials found that payments made by the Andhra Pradesh State Beverages Corporation Limited (APSBCL) to suppliers were transferred to entities on the pretext of goods or services. Many of these were found to be bogus transactions, with recipients either shell entities, non-existent firms or unrelated individuals.
In some cases, inflated transactions were routed through genuine businesses. Funds were also diverted to jewellers to acquire gold and cash, which were handed over as kickbacks.
The ED stated that further investigation was under way.
Published – September 19, 2025 08:07 pm IST
