What Is ED’s Case Against Kejriwal, Sisodia, K Kavitha, Sanjay Singh In Alleged Delhi Liquor Policy Scam

In a major jolt to Aam Aadmi Party (AAP), a trial court on Friday granted six days custody of Party’s national convenor and Delhi Chief Minister Arvind Kejriwal to the Enforcement Directorate in connection with the alleged irregularities Delhi Liquor Policy Case.

The ED has so far arrested former deputy Delhi CM Manish Sisodia, AAP leader Sanjay Singh, BRS leader and Telangana Chief Minister K Chandrasekhar Rao daughter K Kavitha in the case. Here’s a breakdown of ED’s charges against the arrested leaders and the alleged Delhi liquor policy scam.

What Is Delhi Liquor Policy Case?

The ED has alleged that the now scrapped new excise policy was implemented by the AAP leaders as part of a conspiracy to give wholesale business profit of 12% to certain private companies in alchohol business.

In July 2022, the Delhi Chief Secretary Naresh Kumar submitted a report to the Lieutenant Governor (LG) Vinai Kumar Saxena about the alleged procedural lapses in the formulation of the now scrapped Delhi Excise policy.

Kumar in his report to the Delhi LG said that arbitrary and unilateral decisions taken by Manish Sisodia as the Excise Minister in Delhi had caused financial losses of more that Rs 580 crore to the exchequer.

The report also alleged that AAP government and leaders in Delhi got kickbacks from owners and operators of alchohol business in exchange for discounts, extention is licence fee, waiver on penalties and relief due to Covid-19 pandemic,etc. Kumar further alleged that that these kickbakcs were used to influence the Assembly election in Punjab and Goa.

The LG gave this report to the CBI and ordered enquiry. Following which Sisodia was arrested after the CBI named Sisodia and 14 others accused in its FIR.

According to the ED, in the alleged Delhi liquor policy scam, wholesale liquor business was given to private entities. Under this new excise policy a 12% margin was fixed, for a 6% kickback. The ED alleged that the policy was formulated with deliberate loopholes which promoted cartel formations through the back door to benefit AAP leaders.

According to ED, AAP leaders got kickbacks to the tune of Rs 100 crore from the “South Group” linked to K Kavitha.

While arguing against Sisodia’s bail in the Supreme Court, ASG SV Raju appearing for ED had said that the sudden and unexplained increase of the wholesalers’ profit margin under the excise policy from 5% to 12% caused massive losses to not only the public exchequer but also the consumers. The ED is also considering this additional profit margin as proceeds of crime, Raju had then told the top court.

Arvind Kejriwal’s Role In Delhi Liquor Policy According To ED

The ED has arrested Delhi CM Arvind Kejriwal under Section 19 of PMLA. The ED has submitted in the court that Kejriwal has been intrinsically involved in the entire conspiracy of the Delhi Liquor Policy scam wherein certain private persons were favoured and benefitted in a quid pro quo of receiving kickbacks. 

The remand noted by ED says “due to actions of Sh Arvind Kejriwal involving excise policy formulation, hatching the conspiracy of kickbacks with the South Group members, and eventually using part of the proceeds of crime generated out of this scheduled offence in the election campaign of AAP for the Goa Assembly elections, it is clear that all these activities were not only done with his knowledge but also his active collusion.

The ED has contended that Arvind Kejriwal who is the ultimate incharge of the AAP and was intrinsically involved in the acts of policy formulation, kickback scheme and the final use of the proceeds of crime thus generated including conspiracy thereof.

The ED has alleged that Kejriwal is also liable for use of Proceeds of Crime of Rs 45 crore in the election of the AAP in Goa under section 70(1) of PMLA apart from his role in his personal capacity. 

“Kejriwal has conspired with other persons and actively involved in formation of policy for facilitating taking of kickbacks and has played a role in generation, use and concealment of the proceeds of crime,” according to ED.

ED says that as per investigations done so far, the proceeds of crime of about 45 crore which were received as bribe from south group were used in Goa election by AAP. 

ED has held Kejriwal guilty under section 3 of PMLA for commission of offence of money laundering and for actively involved in the process and activities connected with the proceeds of crime and thus liable to be arrested under Section 19 of PMLA.

ED’s Case Against Manish Sisodia In Delhi Liquor Policy

The CBI arrested Sisodia in connection with the alleged scam in the new excise policy on February 26, 2023. He was sent to ED’s custody on March 9. CBI alleged that Sisodia was instrumental in recommending and taking decisions regarding the new liquor policy, without taking approval of competent authority with an intention to extend undue favours to the licensee post tender.

Whereas, the ED has alleged that the new excise policy was implemented as part of a conspiracy to give wholesale business profit of 12% to certain private companies. It says that such a provision was not mentioned in the minutes of meetings of the Group of Ministers (GoM) and were later added by AAP leaders.

ED claims that Vijay Nair (another co-accused) along with others conspired along with South Group to give extraordinary profit margins to wholesalers in the new policy. According to ED, Nair acted on behalf of Kejriwal and deputy Sisodia.

“This policy was being drafted considering the favours to be granted to the South Group and was formed in collusion with Vijay Nair, Manish Sisodia and other members of South Group,” ED says in Kejriwal’s remand note. 

According to ED, Sisodia’s Secretary C Arvind has revealed that Sisodia called him to Kejriwal’s residence and handed over a 30 page document that was the GoM report for the new policy.

“In that document it was mentioned that the wholesale licence should be given to agents (private players) of manufacturers, one wholesale license can be a distributor of any number of manufacturers and the wholesale profit margin was fixed at 12 %. These points were never discusses in the GoM meeting that formulated the now scrapped new Excise Policy for Delhi according to ED.

K Kavitha’s Role In Delhi Liquor Policy Case

A former MP and BRS leader Kavitha who is also the daughter of former Telangana Chief Minister K Chandrasekhar Rao was arrested last week for being part of the ‘South Group’.

The ED claims that the South Group got uninhibited access, undue favours, and secured stakes in established wholesale businesses and multiple retail zones (over and above what was allowed in the policy).

According to ED, partners of this South Group were given a 65% stake in Indospirit in collusion with its owner Sameer Mahendru (another accused in this case). This was allegedly done to recover kickbacks given by the South Group.

Raghav Magunta, P Sarath Chandra Reddy who is also co-founder of Hyderabad-based Aurobindo Pharma are also said to be partners in the South Group according to ED.

Buchi Babu who was CA to K Kavitha has revealed to the ED that Arun Pillai was working with Vijay Nair in policy formulation and Nair was offering provision for favouring K Kavitha. Nair worked with Sisodia and Kejriwal for the same, says ED’s remand note in court.

The ED says that this has been corroborated by WhatsApp messages retrieved from Buchi Babu, wherein certain provisions of the Excise policy were found two days before it was notified. According to Babu’s statement Nair sent these provisions to him and Arun Pillai.

ED’s Allegations Against Sanjay Singh In Delhi Liquor Policy Case

According to ED’s submission in high court, Sanjay Singh is a “key conspirator” in the alleged Delhi Liquor Policy scam. Ha has been accused of being closely associated with Dinesh Arora and Amit Arora (others accused in th scam.)

While replying to Sanjay Singh’s bail plea in the Delhi High Court, the ED said that Singh was involved in creating a special purpose vehicle called M/s Aralias Hospitality Pvt Ltd to launder the “proceeds of crime” that would have been generated from the business arising out of the Delhi liquor policy.

Singh has been accused of acquiring, possessing, concealing, dissipating and using proceeds of crime generated from the alleged loopholes in now scrapped Delhi liquor policy. So according to ED, AAP leaders conspired to make the new excise policy, in order to receive kickbacks from liquor wholesalers and manufacturers. 

ED also allegedly found “confidential documents” relating to the investigation of the Delhi Liquor policy case during the search conducted on Singh’s premises on October 4, 2023.