Probing a liquor scam allegedly orchestrated during the previous YSR Congress Party regime, a Special Investigation Team (SIT) of Andhra Pradesh police has revealed that ₹3,200 crore in kickbacks had changed hands through a syndicate involving top officials and political leaders.
The case, registered after the TDP-led NDA government came to power in June last year, pertains to the alleged defrauding of the state exchequer and distilleries and benefiting certain individuals through illicit gains. A case of conspiracy, criminal breach of trust, corruption, and money laundering was registered under multiple sections of the Indian Penal Code (IPC) and the Prevention of Corruption Act, 1988.
The remand report submitted by the SIT to the Vijayawada Special Court stated that the case involving Kasireddy Raja Shekhar Reddy, also known as Raj Kasireddy, led to a wrongful loss of over ₹3,200 crore to the state exchequer and distilleries, while benefiting certain individuals and select distilleries.
Kasireddy served as the IT advisor to former Chief Minister YS Jagan Mohan Reddy. The SIT suspects he played a key role in the liquor scam.
The case was registered after the advent of the TDP-led NDA government in the state. It was based on a complaint lodged on 20 September, 2024, by Mukesh Kumar Meena, Principal Secretary of Andhra Pradesh, based on a report on “Liquor Procurement and Market Manipulation (2019-2024)” by a five-member committee of the Andhra Pradesh State Breweries Corporation Limited (APSBCL)
Committee findings
According to the committee’s findings, established brands such as Bagpiper Premier Whisky, McDowell’s No. 1, and Seagram’s Royal Stag were deliberately side-lined, leading to their near disappearance from the market. Available stocks of these brands in depots were not supplied to Government Retail Outlets (GROs), causing product expiry and financial losses to suppliers.
New brands, including Adan’s Supreme Blend Superior Grain Whisky, Andhra, and Leela’s Brilliant Blend, received disproportionate Order for Supply (OFS) allocations, far exceeding the stipulated 10,000-case limit for new brands. This violated the Rate Contract Agreement and e-procurement norms, granting undue market share to select suppliers.
The transparent, computer-based OFS system, which calculated allocations using a formula based on average sales and stock levels, was replaced with a discretionary manual process post-2019. This enabled manipulation by a Special Officer, compromising process integrity.
The committee pointed out that these manipulations led to a drastic reduction in the market share of major multinational corporations (MNCs) like United Spirits and Pernod Ricard, from 53.21 percent in 2018-19 to 5.25 percent by 2023-24, while select distilleries benefited disproportionately.
The committee further alleged that the conspiracy was orchestrated by a syndicate involving high-ranking officials, political figures, and private entities, with Kasireddy Raja Shekhar Reddy as a central figure. Other key players included D Vasudeva Reddy, Managing Director of APSBCL and Commissioner of Beverages and Distilleries, Satya Prasad, Assistant Secretary and Special Officer, P Mithun Reddy and V Vijaya Sai Reddy, the two Influential political figures, Sajjala Sridhar Reddy, Muppidi Avinash Reddy (Sumith), and Booneti Chanakya (Prakash), the associates who coordinated kickback collection and supplier communications.
The syndicate’s plan was allegedly formalised in meetings held in Hyderabad and Vijayawada, notably at Vijaya Sai Reddy’s residence on 13 October 2019, and a private building in Jubilee Hills in Hyderabad in December 2019.
These meetings allegedly estimated monthly kickbacks of ₹50-60 crore by manipulating liquor sales data. The automated C-Tel software, which ensured transparency in procurement, was disabled on 15 October 2019, following instructions from Vasudeva Reddy, despite warnings from the software provider about adverse consequences.
Disabling automation
The syndicate allegedly disabled the automated C-Tel platform, which integrated retail sales, stock management, and OFS issuance, and replaced it with a manual system. A private email ID was created to receive OFS requests, while the APT online platform was disrupted— breaking end-to-end integration and allowing for discretionary control over operations.
Kickbacks were allegedly fixed based on the basic price of liquor brands, ranging from ₹150 per case for cheaper brands to ₹600 per case for premium brands. Payments were collected every five days through associates using VPNs, international numbers, and apps like Signal to evade detection.
The committee further alleged that Satya Prasad conducted daily WhatsApp conference calls with depot managers, using his personal phone and laptop to share indent plans crafted by Kasireddy based on kickbacks received. Depot managers were coerced into using GRO login credentials to raise kickback-driven indents, bypassing the market demand.
Illicit funds laundered
Illicit funds were allegedly laundered through shell companies, hawala networks, inflated vendor payments, and fake promotional expenses. Kasireddy allegedly controlled SPY Agro Industries’ accounts, diverting funds to shell companies and investing in real estate ventures like Vaishnavi Infra projects.
The syndicate’s actions resulted in a wrongful loss of over ₹3,200 crore. New suppliers received unlimited OFS allocations, violating the 2015 e-procurement norms, while OFS were denied to popular brands leading to market exclusion, stock expiry, and forced closures or relocations, with MNCs losing significant market share.
Kasireddy’s arrest
Kasireddy Raja Shekhar Reddy was arrested on 21 April 2025, at Hyderabad airport. In a statement, recorded in the presence of mediators, he admitted to orchestrating the kickback system and manipulating liquor trade policies.
Kasireddy played a key role in the conspiracy. He controlled OFS issuance based on kickbacks, using sales data. He also coordinated kickback collection through associates, using secure communication channels.
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