In connection with its money laundering probe into alleged irregularities in the now-scrapped liquor policy of the Delhi government
THE ENFORCEMENT Directorate (ED) on Thursday arrested P Sarath Chandra Reddy, director, Aurobindo Pharma, and Benoy Babu, general manager, International Brands, Pernod Ricard India, in connection with its money laundering probe into alleged irregularities in the now-scrapped liquor policy of the Delhi government. While the agency sought 14 days custody before Special Judge NK Nagpal at Rouse Avenue Court, the district court granted a week’s remand with directions to conduct proceedings under CCTV footage.
The ED told the court Reddy was “one of the kingpins” and a “major beneficiary of the cartelisation” whose cartel group “controlled 30% of Delhi liquor market”. It also accused him of giving a bribe of 100 crore to Delhi Excise officials through AAP Communication in-charge Vijay Nair. Babu, the agency said, “created a nexus to gain market share” and possessed sensitive excise policy documents.
It also told the court he had a role in generating proceeds of crime to the tune of50 crore. “Of the 31 licences, Babu gave away 29 licences to retailers. We also found the draft of Delhi liquor policy in his email. Liquor licences were given out to a select few deliberately,” an ED official, who did not wish to be named, told a Media.
Sarath Reddy is the son of P V Ram Prasad Reddy, Founder, Aurobindo Pharma, and son-in-law of co-founder and managing director K Nityananda Reddy.
Aurobindo is a listed company and a big player in the generic drugs market with a total consolidated turnover of 23,455 crore in 2021-22. Reacting to the arrest of Sarath Reddy, Aurobindo shares plunged 11.69% to close at 478.10 on the BSE. In a communication to the stock exchanges, the company said Sarath Reddy “is not in any way connected with the operations of Aurobindo Pharma or its subsidiaries”.
Pernod Ricard India is a subsidiary of the French spirits company Pernod Ricard, and it markets premium liquor brands such as Glenlivet.
The development is politically significant as the family of Sarath Reddy is related to Andhra Pradesh Chief Minister Jagan Mohan Reddy’s close aide and YSRCP Member of Parliament Vijay Sai Reddy. Sarath’s brother is married to Vijay Sai Reddy’s daughter. In fact, in its March 31, 2012, chargesheet against YS Jagan Mohan Reddy, the Central Bureau of Investigation had named Sarath Reddy as the seventh accused, alleging he had invested Rs 7 crore in Jagan Reddy’s Jagati Publications Private Ltd at an exaggerated premium of Rs 350 per share, and charged him under IPC sections 120-B and 420.
In the district court, advocate Manu Sharma, who represented Reddy, said the agency was recording the statements of his employees to build its case. “This is an old approach – you don’t get documentary evidence, you get oral evidence… An employee who joined the investigation suffered permanent hearing loss in his left ear. If I suffer a beating and can’t hear anymore, what can I do” he said.
Babu’s lawyer Madhav Khurana told the court Babu “is a witness of the CBI as of yesterday”. “This is crucial. If I am not an accused in the predicate offence which is the mother of this offence, can I be made an accused here?” he said.
Advocate Zoheb Hassan, who appeared for the ED told the court, it cannot be that a witness in a scheduled offence can never be an accused in PMLA (Prevention of Money Laundering Act). “If that is accepted, money laundering laws will be defeated in this country,” he said.
An ED official said CBI and ED have separate cases and offences and there was nothing wrong with a person being a witness in one case and an accused in another. “Also, an accused may turn approver at a later stage,” the official said.
Sarath Reddy was earlier questioned twice by ED in the case in which Delhi Deputy Chief Minister Manish Sisodia has been named the prime accused. Three people have been arrested by the agency in the case so far. It had earlier arrested Sameer Mahendru of Indospirit group, and recently raided the residence of Sisodia’s PA and questioned him.
The ED case, registered in September, is based on a CBI FIR filed in August. The CBI had booked Sisodia, three excise department officials, and several vendors and distributors among the 15 accused it had arraigned in its FIR.
“Praveen Kumar Rai, Director, MHA… has conveyed directions of the competent authority for inquiry into the matter of irregularities in framing and implementation of the excise policy of GNCTD of Delhi for the year 2021-22 by Central Bureau of Investigation. He has also forwarded a letter of L-G Vinai Kumar Saxena alleging irregularities in framing and implementation of the excise policy,” the CBI FIR stated.
“The OM is enclosed herewith, which discloses that Manish Sisodia, Deputy CM; Arava Gopi Krishna, then Commissioner (Excise); Anand Tiwari, then Deputy Commissioner (Excise); and Pankaj Bhatnagar, Assistant Commissioner (Excise); Anand Tiwari, then Deputy Commissioner (Excise); and Pankaj Bhatnagar, Assistant Commissioner (Excise) were instrumental in recommending and taking decisions pertaining to excise policy for the year 2021-22 without the approval of competent authority with an intention to extend undue favours to the licensee post tender,” it said.
Citing ‘reliable sources’, the CBI said in its FIR that AAP’s Vijay Nair, Manoj Rai, an ex-employee of Pernod Ricard, the owner of Brindco Spirits Amandeep Dhal, and Mahendru are “actively involved in irregularities in framing and implementation of excise policy”.
“Source further revealed that some of the L-1 licence holders are issuing credit notes to retail vendors with an ab initio intention to divert the funds as an undue pecuniary advantage to public servants. In furtherance to this, they are showing false entries in their books of accounts to keep their record straight. Source further revealed that Amit Arora, director of Buddy Retail Pvt Limited, Gurgaon; Dinesh Arora and Arjun Pandey are close associates of Manish Sisodia and are actively involved in managing and diverting the undue pecuniary advantage collected from liquor licensees to accused public servants,” it said.
“Source further revealed that Sameer Mahendru, MD, Indospirit, has transferred an amount of one crore to the account of Radha Industries. Radha Industries is being managed by Dinesh Arora. Source further revealed that Arun Ramchandra Pillai used to collect undue pecuniary advantage from Sameer Mahendru for onward transmission to accused public servants through Vijay Nair,” the FIR said. (IE)
