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Delhi excise case: Accused formed cartel with ‘South Group’ controlled by Kavitha, says ED

New Delhi: The now-scrapped Delhi excise policy was formulated to provide monetary benefits to some AAP politicians and the accused “formed a cartel” with the ‘South Group’ controlled by Telangana chief minister’s daughter K Kavitha and YSRCP MP Magunta Srinivasulu Reddy among others, the ED alleged in a charge sheet.

However, Kavitha, an MLC of the ruling BRS in Telangana, claimed the allegations against her are completely bogus and termed it “the BJP’s political vendetta”.

The federal probe agency made these claims in its prosecution complaint filed against arrested accused Sameer Mahandru, the promoter of liquor company Indo Spirits, and four firms linked to him.

A special court in Delhi, which hears cases under the Prevention of Money Laundering Act, took cognisance of the charge sheet on Tuesday.

The Enforcement Directorate furnished the statement of Sameer Mahandru, who has been accused by the agency of forming a “super cartel”, and others to allege the South Group “controlled stakes in Indo Spirits through false representation, concealment and proxies” of individuals identified as Arun Pillai and Prem Rahul.

“The partnership was through the proxies and was not genuine. Mahandru never met one of his partners, Prem Rahul who has a 32.5 per cent stake in Indo Spirits,” the ED said.

The probe agency claimed that Mahandru, in collusion with others, “formed a cartel” of retailer-wholesaler-manufacturer.

It involved “liquor company Pernod Ricard, Benoy Babu (an executive of Pernod Ricard), Vijay Nair, representative of AAP, Arun Pillai, Telangana MLC K Kavitha, Ongole MP Magunta Srinivasulu Reddy, his son Raghav Magunta, Sarath Reddy and Abhishek Boinpally (arrested by the ED in the case) and Buchi Babu (CA linked to the South group) who are collectively called ‘South Group’ represented by Arun Pillai, Boinpally and Buchi Babu, the ED claimed in the charge sheet.

Kavitha took to Twitter to say, “The accusations against me are completely bogus and false. Only time will prove my sincerity. It’s a political vendetta of the BJP as they fear BRS Party chief and CM KCR (K Chandrasekhar Rao) Ji’s expose on their anti-farmer and pro-capitalist policies.”

Earlier this month, a team of CBI sleuths examined Kavitha in Hyderabad in connection with the Delhi excise policy case and recorded her statement.

The Enforcement Directorate claimed that Mahandru acquired L1 wholesale licence in the name of Indo Spirits while the ‘South Group’ acquired retail zonal license of seven zones in Delhi.

Mahandru also had two retail zonal licenses in the name of ‘Khao Gali’ and in this manner, the cartel controlled nine out of 32 retail zones in the national capital during the operational period of the Delhi Excise Policy 2021-22, the ED alleged in the charge sheet.

“The ‘South Group’ has given kickbacks of approximately Rs 100 crore to Vijay Nair (AAP media in-charge) in exchange for favours and undue benefits to them in the liquor business in Delhi,” the agency claimed.

It said the “cartel” worked to establish a “well-oiled kickback mechanism to recover the kickbacks paid. The kickbacks of Rs 100 crore paid, were recovered via profits generated by the wholesale operations of Indo Spirits and the retail operations of the zones owned by the ‘South Group’ and Mahandru.”

The agency quoted Mahandru’s statement where he claimed that he met Magunta Srinivasulu Reddy, a YSRCP Lok Sabha MP, for “discussion of liquor trade two to three times at his residence in Delhi. His son Raghav and Buchi Babu were also present there.”

Mahandru told the ED that “Arun was representing Kavitha’s interest and Prem was representing MSR’s (Manguta Srinivasulu Reddy) interest in this firm. However, Sameer (Mahandru) was only dealing with Arun for the entire 65 per cent stakes and had not even met Prem”.

“Arun and the group through multiple conversations had revealed to Sameer that their actual investors and political connections that Vijay (Nair) was talking about were MSR (Ongole MP), K Kavitha and Sarath Reddy (arrested by ED in the case).

Mahandru told the ED that K Kavitha was the daughter of Telangana Chief Minister K Chandrashekhar Rao.

In his statement, Mahandru claimed that Arun “made him speak to K Kavitha on Facetime (an audio/video calling feature on iPhone) through his phone where she congratulated him for Delhi business and said she was very happy that they have partnered up”.

Mahandru claimed in front of the ED that he met K Kavitha “in early 2022 in Hyderabad at her house. In this meeting, Sameer, Sarath, AP (Arun Pillai), AB (Abhishek Boinpally) and Kavitha and her husband Anil were present.”

“In that meeting, Kavitha said to Sameer (Mahandru) that Arun is like family to her and they will take this relationship to a larger scale in multiple states and expand majorly,” the charge sheet, accessed by PTI, stated.

The agency alleged that Indo Spirits was “given the wholesale distribution business of Pernod Ricard, one of the biggest manufacturers (of liquor) in the country on the directions of Vijay Nair.”

The ED also claimed in the charge sheet that Vijay Nair, who “orchestrated the entire scam”, is not an ordinary worker of the AAP but a “close associate” of Delhi Chief Minister Arvind Kejriwal.

Since 2020, Nair has been living in the government residence allotted to Delhi Transport Minister Kailash Gahlot, it claimed.

Terming this practice of allowing the use of a government residence to someone else by a public servant a “criminal breach of trust” the ED said it has asked the CBI to take action.

The probe agency claimed that Dinesh Arora, an accused-turned-approver in the case, said in his statement that he “coordinated a transfer of part of kickback from the ‘South Group’ to Vijay Nair to the tune of about Rs 30-31 crore from Hyderabad to Delhi”.

The ED case of money laundering is based on a CBI FIR and the anti-money laundering agency has arrested five people till now in the case.

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