In the last 10 days, the Enforcement Directorate (ED) arrested both Delhi Chief Minister Arvind Kejriwal and Bharat Rashtra Samithi (BRS) leader K Kavitha for their alleged involvement in the Delhi excise policy 'scam'. A lobby of liquor traders, named ‘South Group’, was a link that came up during both the arrests.
The Enforcement Directorate (ED) had earlier claimed to have established a link between the South Group, Kavitha and Aam Aadmi Party (AAP) while investigating the Delhi excise policy case.
The ED alleged on Friday that Kejriwal demanded ₹100 crore from some accused from the South Group for contesting the Punjab elections. Earlier, the agency said Kavitha was a key member of the south cartel.
Here's what the South Group is and what is its link with Kejriwal and Kavitha
According to the Enforcement Directorate, the so-called 'South Group', the liquor cartel, comprised Telangana MLC Kavitha, Sarath Reddy (promoter of Aurobindo Group), Magunta Srinivasulu Reddy (YSRCP MP, Ongole), his son Raghav Magunta, and others.
"The South Group was being represented by (Hyderabad businessman) Arun Ramachandra Pillai, Abhishek Boinpalli (Hyderabad businessman) and Butchi Babu (chartered accountant)," the ED's investigation revealed as per ANI.
Kavitha was allegedly a key member of 'South Group'. As per the ED, she paid kickbacks of ₹100 crore to Delhi CM Arvind Kejriwal's AAP in return for favours — a big share of liquor licences in Delhi — under the now-scrapped excise policy for 2021-22.
The agency claimed that she was a key figure of the 'South Group' who made "benami investments" in beneficiary liquor companies. She, however, has not been named as an accused in any chargesheet filed by the ED, news agency PTI reported on March 16.
Now, it is alleged that Hyderabad businessman Arun Pillai, who represented South Group, was allegedly coordinating with many people to execute the political understanding between the South Group and an AAP leader. Meanwhile, the ED alleged that the AAP's communication incharge Vijay Nair functioned as the party's link to the south cartel.
The investigation by the financial crime-fighting agency reportedly revealed that Arun Pillai is a 32.5 per cent partner in Indo Spirits, which had got an L1 licence. (Licences in form L-1 are granted for the wholesale supply of Indian liquor).
Indo Spirits is a partnership firm of Arun Pillai, Prem Rahul and Indospirit Distribution Limited. Here, Arun Pillai and Prem Rahul represented "the benami investments of Kavitha and Magunta Srinivasulu Reddy and his son Raghava Magunta", according to the ED.
The ED and the CBI alleged that irregularities were committed while modifying the excise policy. They claimed undue favours were extended to licence holders, the licence fee was waived or reduced and the L-1 licence was extended without the competent authority's approval. It was further alleged that the beneficiaries diverted "illegal" gains to the accused officials and made false entries in their books of account to evade detection.
Kavitha faced charges for allegedly conspiring with top AAP leaders in exchange for favours in the Delhi excise policy formulation and implementation.
The ED said in a statement earlier that in exchange for the kickbacks paid to AAP leaders, Kavitha allegedly had access to the policy formulation and was offered provisions to ensure a favourable position for her.
"She further got stakes in the partnership of Indo Spirits, through her dummy Arun Pillai [who was a partner of 32.5 per cent in Indo Spirits], without substantial investment in this firm and distribution business of M/s Pernod Ricard India Pvt Ltd, which is one of the biggest manufacturers in the country and thus made Indo Spirits, the most profitable L1 in the Delhi Excise policy 2021-22 period and thus recouped proceeds of crime in the guise of profits," ANI reported citing the ED's statement.
The central probe agency further alleged that the chats between Kavitha's CA Buchi Babu and Raghav Magunta "clearly showed that she was getting 33 per cent stakes in M/s Indo Spirits". However, the BRS leader denied having any such share or stake.
According to the report, the agency also stated that Kavitha allegedly orchestrated a deal with Kejriwal and then Deputy Chief Minister and Minister of Excise, Manish Sisodia, wherein she along with other members of the South Group paid them kickbacks through a string of intermediaries and middlemen.
Vijay Nair allegedly received kickbacks to the tune of at least ₹100 crore, on behalf of the AAP leaders, from the "South Group". Nair was arrested in the case by both the ED and the CBI.
The ED had earlier said that the South Group "gave kickbacks of ₹100 crore" to AAP leaders. These funds, it claimed, were used for the assembly elections in Goa and significant amounts of money were given to AAP candidates in cash.
The ED accused Kejriwal on Friday of being a "key conspirator" in the case. The counsel representing the agency in the Delhi court on Friday said the AAP is not an individual but a company, and every person responsible for the conduct of the company will be held responsible - including Arvind Kejriwal.
