'Rs 60cr monthly kickbacks, Jagan Reddy recipient': Explosive details from Andhra Pradesh liquor scam chargesheet

YSRC chief Jagan Mohan Reddy

Former Andhra Pradesh chief minister and YSR Congress Party (YSRCP) leader YS Jagan Mohan Reddy is under the scanner for his alleged involvement in the Rs 3,500 crore liquor scam in the state.

A 305-page chargesheet has laid out details of the scam which allegedly occurred during Jagan's tenure as chief minister. Although the Special Investigation Team (SIT) has not yet accused him, the report suggests he is central to what could become a serious political and legal issue.

The report said that a kickback scheme existed during Reddy's tenure, where distilleries paid between Rs 50 crore and Rs 60 crore each month. Investigators say this money was sent through shell companies and trusted aides before reaching Jagan.

Witnesses claimed that Kesireddy Rajasekhar Reddy, the alleged mastermind, collected the cash. This cash then passed through senior leaders in the YSRCP, such as Vijay Sai Reddy, Mithun Reddy and Balaji Govindappa, before going to the former chief minister.

Jagan’s name appears three times in the report, even though he is not formally accused. The SIT believes he benefitted from a scheme that changed excise policy, placed loyal supporters in important jobs, and used fake distilleries to control the liquor market.

One SIT official bluntly said in court documents that the policy aimed to ensure large kickbacks, mostly in cash and gold bullion. Distilleries that did not comply reportedly faced unnecessary delays in getting approvals.

First arrest sends signal

Last week, the Special Investigation Team (SIT) arrested YSRCP MP PV Midhun Reddy after several hours of questioning. He will remain in jail until August 1, along with eleven other people. Among those arrested are Rajasekhar Reddy, Jagan’s former IT adviser; K Dhanunjaya Reddy from the chief minister’s office; and Balaji Govindappa, the director of Bharati Cements.

The Enforcement Directorate is also investigating the case for money laundering. Investigators believe that the kickbacks funded land deals, gold purchases, and luxury items in Dubai and Africa, and even helped pay for the YSRCP’s election campaigns.

The case follows a similar pattern as the Delhi liquor policy case, which led to the arrest of BRS leader Kavitha Kalvakuntla earlier this year.

However, analysts warn that arresting someone without strong proof could backfire. According to a senior journalist tracking TDP affairs, Nethaji Rao, if Naidu doesn’t have a solid case against Jagan, he risks making Jagan a martyr. “If Jagan is arrested and then released due to weak evidence, it will help him politically,” he said.

Jagan slams 'manufactured narrative'

Jagan has spoken out against the charges. On X, he called the accusations a “manufactured narrative” and said the TDP is engaging in revenge politics. He claimed that Midhun Reddy’s arrest stems from statements made under pressure and torture.

YSRCP leaders support him, saying the SIT is misusing its power. Tirupati MP Maddila Gurumoorthy argued that officials forced witnesses to sign documents with which they disagreed. In contrast, Congress leader Manickam Tagore called Jagan and his wife Bharathi "the real masterminds" behind the scam and described Midhun Reddy as "just a pawn".

On the ground, the SIT appears confident. Their chargesheet claims that the entire liquor policy was changed from 2019 to 2024 to create a money-making scheme for a small group of party insiders. They removed automated systems, placed loyal supporters in important roles, and sidelined distilleries that refused to pay.

Sources indicate that the Special Investigation Team (SIT) is likely to summon Jagan soon under Section 41A of the Criminal Procedure Code, which requires him to appear for questioning. If he refuses to comply or if investigators believe they already have sufficient evidence, an arrest may be a possibility.

Jagan has faced legal troubles before; he was arrested in 2012 in a disproportionate assets case, where he spent over a year in jail before being released on bail. That case is still progressing through the courts.

However, the current situation is different. Jagan is no longer the chief minister. The Telugu Desam Party (TDP) is in power, the Enforcement Directorate (ED) is investigating him, and several of his closest aides are already in jail.

Nonetheless, Chief Minister and TDP President Chandrababu Naidu may find it challenging to push too hard against Jagan.