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A Delhi court on Monday extended till July 3 the judicial custody of BRS leader K Kavitha in a money laundering case linked to the alleged excise scam.

 

Special Judge Kaveri Baweja extended the custody after Kavitha was produced before the court in pursuance of its earlier order issuing a production warrant against her.

 

The court had issued the warrants after taking cognisance of a charge sheet against the BRS leader in the case on May 29.

 

The court also granted bail to three co-accused persons- Prince, Damodar and Arvind Singh.

 

The three accused were charge sheeted without being arrested during investigation by the ED.

 

The Enforcement Directorate (ED) has filed a supplementary chargesheet in a Delhi court, revealing that the total Proceeds of Crime (PoC) identified so far in the excise policy money laundering case is Rs 1100 crore. The charge sheet focuses on a PoC of Rs 292.8 crore, involving Bharat Rashtra Samithi (BRS) leader K Kavitha and several others.

 

According to the ED, Kavitha conspired with members of the South Group and AAP leaders to pay kickbacks of Rs 100 crore and receive undue benefits through the establishment of Indo Spirits, which generated Rs 192.8 crore in illicit profits.

 

The chargesheet alleges that Kavitha participated in generating, acquiring, and using the PoC of Rs 192.8 crore by projecting Indo Spirits as a legitimate business entity. She also allegedly received Rs 5.5 crore from Indo Spirits through her associate Abhishek Boinpally.

 

Kavitha is accused of paying kickbacks to government officials via middlemen, thereby generating and transferring Rs 100 crore in PoC. The chargesheet also claims that Kavitha actively destroyed digital evidence, including formatting nine mobile phones, to conceal her involvement in the scam.

 

Additionally, she is accused of influencing witnesses, with her Chartered Accountant Buchi Babu revealing that an associate was pressured to retract statements against her.

 

The charge sheet further states that Kavitha, in conspiracy with others, formed a partnership using dummies and proxy persons to acquire and possess Rs 192.8 crore under the guise of profits from Indo Spirits between November 2021 and August 2022. This included the possession of approximately Rs 32 crore through her proxy, Arun Pillai, as part of her share of the profits from Indo Spirits.

 

On May 29, 2024, the Rouse Avenue Court took cognizance of the ED's supplementary prosecution complaint against K Kavitha and other accused, including Chanpreet Singh, Damodar Sharma, Prince Kumar, and Arvind Singh. Earlier, on May 6, the Rouse Avenue Court of Delhi dismissed Kavitha's bail petitions in connection with the CBI and ED cases related to the excise policy case. Kavitha was arrested by the ED on March 15, 2024, and by the CBI on April 11, 2024.

 

The CBI stated that Kavitha’s arrest was necessary to conduct custodial interrogation to confront her with evidence and witnesses, unearth the larger conspiracy related to the excise policy, and establish the money trail of the ill-gotten gains. The CBI inquiry was recommended based on a report by the Delhi Chief Secretary filed in July, which indicated prima facie violations of the GNCTD Act 1991, Transaction of Business Rules 1993, Delhi Excise Act 2009, and Delhi Excise Rules 2010.

 

Both the ED and CBI have alleged that irregularities were committed in modifying the excise policy, with undue favours extended to licence holders, waiver or reduction of licence fees, and the extension of the L-1 licence without the competent authority's approval.

 

These actions allegedly resulted in a loss of Rs 144.36 crore to the exchequer. The beneficiaries are accused of diverting illegal gains to the accused officials and making false entries in their books of account to evade detection. Additionally, the Excise Department’s decision to refund the earnest money deposit of about Rs 30 crore to a successful tenderer against the set rules and the waiver of tendered licence fees from December 28, 2021, to January 27, 2022, due to COVID-19, further compounded the financial losses.