Liquor syndicate made Rs 100 cr a month, laundered funds via shell firms: ED

Hyderabad: Enforcement Directorate has alleged that a liquor syndicate operating in Andhra Pradesh generated illegal revenues of nearly ₹100 crore every month by manipulating procurement and supply mechanisms in the state's liquor trade.The proceeds, investigators said, were routed through a network of shell firms and complex financial transactions to conceal their criminal origin. According to the ED, physical cash kickbacks were collected and stored at multiple locations in Hyderabad before being moved, distributed or disposed of by designated cash handlers of the syndicate.
Investigators said the syndicate used a platform of bank accounts and a web of shell and front entities to launder the funds and project them as legitimate income. Entities such as Olwick, Kripati, Nysna Multiventures, Arroyo, Ezyload and D-Cart were allegedly used to layer funds through complex transactions without any genuine business purpose, thereby concealing the illicit source and nature of the proceeds. Another major source of illicit revenue, the ED said, was the manipulation of liquor transportation contracts awarded by Andhra Pradesh State Beverages Corporation Limited (APSBCL). Investigators found that a centralised transportation tender was awarded to Sigma Supply Chain Solutions Pvt Ltd at rates significantly higher than the earlier depot-wise transportation costs.Diverted to entitiesAlthough the contract was awarded in the company's name, the ED alleged that operational control was exercised by members of the liquor syndicate, mainly Tukekula Eswar Kiran Kumar Reddy and Saif Ahmad, among others. A substantial portion of the contract receipts was allegedly diverted to entities such as TEKKR, Arroyo and Ezyload, which investigators say were used as conduits to launder the proceeds of crime. The ED probe further found that prior to 2019, the liquor trade in Andhra Pradesh was regulated through a transparent automated software system that digitally tracked procurement, supply and sales, leaving a verifiable audit trail. However, after the 2019 assembly elections, the state govt brought retail liquor outlets under govt control through govt retail outlets operated by APSBCL. ED said, "As part of the criminal conspiracy, the automated system was deliberately disabled and replaced with a manual system, thereby vesting unfettered discretionary powers with APSBCL officials in the issuance of orders for supply (OFS).' OFS misused"The manual OFS regime was misused to discriminate against established liquor brands, which were deliberately marginalised or removed from the market. Simultaneously, preferential and irregular allocations were extended to select ‘favoured' brands on receipt of kickbacks. As part of the scheme, the syndicate promoted the introduction of similar sounding brands with artificially inflated basic prices. This pricing manipulation enabled the distilleries manufacturing such brands to generate surplus margins, which were utilised to meet the illegal monetary demands of the cartel," the ED alleged. The agency also claimed that distilleries were forced to pay illegal kickbacks ranging from 15% to 20% of the basic price per case as a precondition for receiving OFS approvals. Manufacturers who refused were allegedly subjected to coercive measures, including withholding of legitimate payments and rejection of supply orders. According to investigators, communication related to the demand and collection of kickbacks was carried out through encrypted VOIP calls and applications such as Signal to conceal the identities and roles of key operatives, including Booneti Chanakya (alias Prakash), Muppidi Avinash (alias Sumeeth) and Mohammed Saif.