Jagan Mohan Reddy Named As Beneficiary In ₹3,500 Crore Liquor Scam, Not Listed As Accused

A 305-page chargesheet filed by the Special Investigation Team (SIT) of Andhra Pradesh Police in the ₹3,500 crore liquor policy scam has named former Chief Minister YS Jagan Mohan Reddy as the ultimate recipient of monthly kickbacks during his tenure between 2019 and 2024. However, he has not been named as an accused in the case yet.

According to the chargesheet, from 2019 to 2024, an estimated ₹50 to ₹60 crore was collected every month from distilleries. These funds were allegedly funneled through a network involving close aides and shell companies, eventually reaching Jagan Mohan Reddy. Witness testimonies cited in the chargesheet claim that the collected sums were first passed to Kesireddy Rajasekhar Reddy (A-1), then to P V Midhun Reddy (A-4), Vijay Sai Reddy (A-5), and Balaji (A-33), who in turn routed them to Jagan.

The case gained further momentum with the recent arrest of Rajampet MP and YSRCP Lok Sabha floor leader P V Midhun Reddy. The SIT alleges he played a key role in executing the scam and facilitated its use to fund the YSRCP's 2024 Assembly election campaign. Described as a "core conspirator from inception to execution," Midhun Reddy is accused of helping design the excise policy and coordinating the collection of kickbacks.

According to investigators, the liquor policy was deliberately skewed to extort distilleries and redirect funds into party coffers. Distilleries were allegedly forced to pay bribes of up to 20% of the base price or face being cut out of supply chains. The system was manipulated by eliminating the automated Order for Supply (OFS) mechanism and replacing it with a manual process to evade oversight.

The majority of kickbacks were received in gold, cash, or bullion, with portions allegedly used to purchase luxury assets abroad, including properties in Dubai and Africa. Kasireddy Rajasekhar Reddy, a former IT advisor to Jagan and identified by the SIT as the "mastermind," is accused of orchestrating the scheme through over 30 firms. He also allegedly planted loyalists within the Andhra Pradesh State Beverages Corporation Limited (APSBCL) to manage illicit transactions and laundered money.

The chargesheet mentions that the scam had its roots in a 2019 meeting held at Hotel Park Hyatt, Hyderabad, where distillery owners were summoned by YSRCP leaders and warned to comply with the scheme or face business loss.

The Enforcement Directorate (ED) has initiated a separate investigation under the Prevention of Money Laundering Act (PMLA), with an ECIR registered in May.

In response to Midhun Reddy's arrest, the YSRCP alleged political vendetta by Chief Minister N Chandrababu Naidu's government, calling it a "misuse of power to target opposition leaders." Some party insiders claimed that Midhun's increasing influence following Vijayasai Reddy's sidelining made him a threat, especially since he had become the party's main face in Delhi.

However, leaders from the ruling TDP insist that the arrest is based on solid evidence. "The funds acquired through illegal channels were used to finance YSRCP's 2024 election campaign," a senior TDP leader stated.

What is the Alleged Scam?

The ₹3,500 crore scam pertains to the liquor policy introduced by the YSRCP government in 2019, which was publicly presented as part of a phased prohibition plan. Instead, the SIT alleges the policy was exploited to benefit select distilleries and shell liquor brands in return for substantial monthly bribes. Popular brands were reportedly replaced with lesser-known ones under a controlled manual supply system.

Liquor manufacturers were coerced into paying bribes ranging from 12% to 20% of the base price, with threats of losing their OFS allocations if they failed to comply. The SIT says the entire scheme was coordinated to systematically extract funds and launder them through dummy companies, real estate, and offshore assets.

The investigation continues as both the SIT and ED deepen their probe into what appears to be one of the largest political kickback scandals in Andhra Pradesh's recent history.