Hyderabad: The arrest of K. Kavitha, daughter of former Telangana chief minister K. Chandrasekhar Rao, by the Central Bureau of Investigation (CBI) from Tihar jail in Delhi on Thursday would actually mean that she has to get bail in two cases to come out of jail.
Kavitha was earlier arrested by the Enforcement Directorate (ED) from her residence in Hyderabad on March 15 in the Delhi liquor policy case and has been lodged in Tihar jail for the last 17 days.
However, it was the CBI that initially filed a first information report (FIR) in the alleged scam involving payment of Rs 100 crore by Kavitha and other members of her cartel called South Group as kickbacks allegedly to Aam Aadmi Party (AAP) leaders of Delhi, mainly deputy chief minister and excise minister Manish Sisodia, for favours in framing and implementation of excise policy of Delhi for 2021-22.
Both the central investigating agencies had been pursuing the alleged scam in their respective domain since August 2022 when the CBI booked the case. As Section 120(B) of the Indian Penal Code and Section 7 of the Prevention of Corruption Act formed scheduled offences under the Prevention of Money Laundering Act (PMLA), the ED also booked its own Enforcement Case Information Report (ECIR) within five days.
The two agencies had identified Kavitha as kingpin and key conspirator in the case along with other members of South Group which was allowed monopolisation and cartelisation of wholesale and retail liquor trade in Delhi under a new policy which was later struck down.
While the ED identified Kavitha with cornering stakes in the partnership of M/s Indospirit, a leading distributor of alcoholic beverages, without substantial investment, the CBI’s custody report filed with the court in Delhi on Friday mentioned some of her criminal acts that attracted prosecution under IPC and Prevention of Corruption Act as a member of Telangana Legislative Council.
For instance, the report highlighted that Kavitha threatened P. Sarathchandra Reddy, director of Aurobindo Pharma, to sign an agreement in the guise of a land deal with her in support of a fake transaction involving agricultural land in Mahbubnagar. No land was actually transferred in the deal. It was supposed to be a sham to cover up a Rs 14 crore transfer to Kavitha for running a liquor business in allotted five zones of Delhi.
Also, the profit margin of Indospirit was hiked to 12% as part of the policy. The South Group will siphon off 6% from the profit of Indospirit which was nothing but a vehicle for recoupment of Rs 100 crore advance paid as kickbacks to AAP leaders and their team.
The YSR Congress MP Magunta Srinivasulu Reddy and his son Raghava Reddy who are accused turned approvers in the case will have a 32.5% stake in the profits of Indospirit for their Rs 50 crore contribution in the Rs 100 crore kickbacks. Sharathchandra Reddy will contribute Rs 25 crore at Rs 5 crore per zone where the business will operate. He gave another Rs 80 lakh to Telangana Jagruthi, a organisation run by Kavitha.
The ECIR of ED tracked the trail of money through bags and hawala and how the payments were made through a string of intermediaries and middlemen to fund the election expenditure of AAP in Goa.
The ED observed in the report that Kavitha was intrinsically involved in the conspiracy of policy formulation, kickbacks scheme, final profits generated and proceeds of crime laundered through Indospirit.
She also enjoyed a 33% stake in Indospirit which was the platform for a money laundering ecosystem to generate proceeds of crime to the tune of Rs 292. 8 crore. Kavitha was in fact only named a witness when the CBI first questioned her at her residence in Hyderabad on December 2, 2022. The agency included her as an accused when it filed the chargesheet in court on February 23 this year. She was served notice to appear before the agency three days later but she wrote back expressing inability due to prior engagements.
The ED also served her summons five times which she turned down. Then, the ED arrested her on March 15 and took her into custody for a 10-day interrogation.
She was remanded to judicial custody on March 26 and has been in Tihar jail since. The CBI got the court permission to question her in jail on March 6. This was challenged by her in court on the same day on the ground that she was not given notice.
The CBI informed the court on April 10 that there was no need to file a counter to Kavitha’s contention as she was already questioned. Her petition challenging her arrest by CBI is scheduled for hearing on April 26.
