The Enforcement Directorate (ED) has stepped up its investigation into the Andhra Pradesh liquor scam, with a massive crackdown that saw simultaneous raids across multiple states. This isn’t just a local issue; the ED conducted searches at over 20 locations in Telangana, Andhra Pradesh, Tamil Nadu, Karnataka, and Delhi-NCR on Thursday. The focus? Intermediaries who are allegedly part of a network that laundered nearly ₹3,500 crore through shell firms, fake invoices, and hawala channels.
This action follows a predicate offense registered by a Special Investigation Team (SIT) of the Andhra Pradesh police, which is probing the financial irregularities. The ED, which is the country’s financial crime-fighting agency, has now invoked the Prevention of Money Laundering Act (PMLA) to follow the money trail. Officials say the raids targeted entities suspected of routing kickbacks through bogus or inflated invoices. The premises of several individuals and firms, including jewelers and other businesses, were searched as part of the probe.
The Heart of the Scam: Allegations and Facts
According to the SIT, the scam is a complex web of corruption involving liquor companies, officials, and intermediaries. The key allegation is that at least 16 liquor companies paid ₹1,677 crore in bribes to secure supply orders worth ₹10,835 crore from the state-run Andhra Pradesh State Beverages Corporation Limited (APSBCL) between 2019 and 2024. The SIT’s investigation revealed that during this period, over 90% of the liquor supply orders went to just 40 of the 111 registered companies.
The probe alleges that a syndicate of individuals and officials manipulated the state’s liquor policy to get kickbacks. Once APSBCL released payments to the distilleries, a large chunk of that money was allegedly diverted and then converted into cash through the guise of “raw-material purchases” and “brand promotions.” This illicit cash was then supposedly handed over as bribes to beneficiaries. The money laundering involved a network of low-profile individuals, such as office boys and employees, who were allegedly used as conduits to circulate illicit funds through a web of bank accounts.
The origins of this controversy can be traced back to the previous YSRCP government’s 2019 liquor policy. The government took over all liquor retail outlets, claiming it was a step towards phased prohibition. However, a Special Investigation Team was later formed to investigate allegations of large-scale irregularities in the implementation of this policy.
The SIT, in its chargesheets, alleged that the new policy was designed with the intent of having full control over the liquor supply and sales, which in turn would help collect commissions and kickbacks. The investigators claim that some distilleries were intimidated and threatened with a loss of business if they didn’t pay the kickbacks. The SIT has arrested several individuals, including a YSRCP MP, and has also named the former chief minister as a beneficiary of the alleged kickbacks, though he has not been named as an accused in the prosecution complaint. The YSRCP has consistently denied all these allegations, calling them politically motivated and baseless. The ED’s latest raids are a new chapter in this ongoing, high-stakes investigation.
