Visakhapatnam: The Andhra Pradesh government's Special Investigation Team (SIT) has arrested Kassireddy Raja Shekhar Reddy (Raj Kasireddy), former IT Adviser to then Chief Minister Y.S. Jagan Mohan Reddy, in connection with an alleged large-scale liquor scam estimated over Rs. 3,200 crore, according to a remand report accessed by The Wire.

The report, which was filed seeking Kasireddy’s judicial custody, details allegations of criminal conspiracy, cheating, corruption, and money laundering within the Andhra Pradesh State Beverages Corporation Limited (APSBCL) between October 2019 and March 2024, during the Yuvajana Sramika Rythu Congress Party (YSRCP) government's tenure. The SIT probe was ordered by the current Telugu Desam Party (TDP)-led coalition, investigating the previous administration.

The remand report alleges Kasireddy was the "key person" in a conspiracy also said to involve senior YSRCP figures like Members of Parliament P. Mithun Reddy and V. Vijayasai Reddy (VSR), along with officials Vasudeva Reddy (then APSBCL MD), D. Satya Prasad (APSBCL Special Officer), and others. The alleged goal was generating massive kickbacks by manipulating liquor procurement.

SIT report details alleged kickbacks totalling Rs. 3,200 crore

According to the SIT remand report on Kasireddy, the alleged conspiracy involved dismantling a transparent, automated system for issuing supply orders to distilleries. It was replaced with a discretionary manual process allegedly controlled via kickbacks coordinated by Kasireddy.

The report claims this led to suppressing popular liquor brands while promoting specific "Blue-Eyed" brands (blue being YSRCP's official party color) linked to kickbacks (estimated at Rs. 50-60 crore each month, totalling Rs. 3,200 crore). It also alleges complex money laundering via shell companies and hawala networks, plus a loss of Rs. 200 crore to the state through improper discount policies. The report identifies Kasireddy as controlling the operation, from receiving sales data to managing kickbacks and planning indents.

The SIT report claims that Kasireddy admitted guilt during interrogation after his April 21 arrest and implicated others, stating that former Chief Minister Y.S. Jagan Mohan Reddy had "endorsed" policy changes for revenue generation and "party fund." However, the report explicitly notes Kasireddy refused to sign this alleged confessional statement.

Kasireddy's lawyer denies confession

Speaking to The Wire, Manohar Reddy, counsel for Kessireddy strongly refuted the SIT's allegations, denying any confession and alleging political motivation behind his arrest along with procedural misconduct.

Regarding the alleged confession, Manohar Reddy stated that Kasireddy never confessed and refused to sign the police-prepared statement, allegedly written under "the ruling party's direction." 

"If such a statement occurred while in police custody, what stopped the police from submitting the video and audio recordings... to the court, especially considering that there are recordings where he refused to sign?", said Manohar Reddy.

He stressed that under Section 24 of the Evidence Act, coerced confessions are inadmissible, and Kasireddy maintained in court that his role was strictly IT advisery, unconnected to excise policy.

Responding to Vijayasai Reddy's public statement naming Kasireddy the "mastermind," Manohar Reddy dismissed it as an "exculpatory" statement from a co-accused. He argued, "an allegation made by one accused person against another serves only as an attribution and does not constitute a fact," citing legal principles that such statements lack evidentiary value against another accused.

Also Read: Will Vijayasai Reddy Join the BJP?

Vijayasai Reddy, a long-time associate of Y.S. Jagan Mohan Reddy and Accused No. 2 in a separate, long-pending disproportionate assets cases, resigned from the YSRCP and was questioned by the SIT about the liquor probe on April 18.

Manohar Reddy asserted the investigation is "politically motivated" and a "calculated misuse of authority aimed at implicating key figures from the previous government." He alleged "intimidation" of witnesses to coerce statements and questioned potential "fraudulent practices with the Jurisdictional Magistrate" in recording statements.

He noted that no new distillery licenses were granted under YSRCP, and state revenue increased during 2019-2024 compared to 2014-2019, suggesting figures were "inflated or fabricated."

Outlining the defense, he stressed that despite the time since the FIR (Sept 2024), the SIT "could not gather any incriminating material."

Manohar Reddy highlighted that the Competition Commission of India previously dismissed similar allegations (Case No. 45/2021). He characterised the SIT's case as "presenting a fictitious fact" and a "clear abuse of power... driven by the changing demands of the State Political Chief Executive."

YSRCP denounces allegations as 'fabricated political drama'

The YSRCP leadership echoed claims of political vendetta. Former Minister Merugu Nagarjuna told The Wire the probe is a "fabricated" and "scripted political drama" by the TDP-led government.

Nagarjuna asserted the alleged scam is "entirely fictitious," accusing the SIT of relying solely on "coerced statements obtained through harassment" and threats. He claimed key witnesses like former APSBCL MD Vasudeva Reddy were pressured into giving false statements.

"The SIT has failed to produce any financial trail, forensic proof, or documentary evidence to substantiate its allegations," Nagarjuna stated. He argued the kickback theory was illogical, as YSRCP reforms decreased liquor sales.

"Logically, distilleries would not pay bribes to a government that curtailed their earnings," he said, accusing the SIT of shifting narratives due to lack of evidence.

Nagarjuna insisted "the real liquor scam occurred under TDP’s regime" (2014-19), alleging corruption, controversial orders causing revenue loss, and sales above MRP. He cited previous CAG objections and a CID case against current Chief Minister Chandrababu Naidu and others during that period, claiming it was "quietly shelved" after TDP returned to power.

Nagarjuna called the current SIT probe a "deliberate attempt by the coalition to cover up its ongoing irregularities" and demanded the CID case against Naidu be reopened and handed to the CBI for independent investigation.

Meanwhile, Kessireddy faces charges including criminal breach of trust by a public servant (IPC 409), cheating (IPC 420), criminal conspiracy (IPC 120B), and sections of the Prevention of Corruption Act. He remains in judicial custody as the investigation continues.

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