Hyderabad: The Enforcement Directorate (ED) said that a company with no distillery, manufacturing infrastructure, or machinery of its own allegedly conducted business worth 732 crore in less than three years in the Andhra Pradesh liquor case. It did so by leasing other units, securing large supply orders, and routing funds back to a liquor syndicate, according to the ED’s provisional attachment order in the case.‘To benefit cartel’The ED described Adan Distilleries (ADPL) as a ‘well-planned criminal shell’ and alleged that its operations were sustained through political backing, an initial funding trail of over 60 crore from personal accounts linked to prominent political figures, and an estimated 135 crore kickback network.The agency identified ADPL as a central special purpose vehicle allegedly created to exploit the state’s liquor trade for the benefit of a cartel. Though it appeared on paper to be a commercial liquor business, the probe agency said it neither owned nor operated a distillery and had no production machinery of its own. Between May 2020 and December 2022, ADPL is alleged to have generated business worth about 732 crore. Instead of producing liquor itself, it allegedly tied up with and leased established distilleries, including Vishaka Distilleries, PMK Distilleries, and SPY Agro Industries, to manufacture its flagship brand, Supreme Blend Whisky. The ED alleged that the syndicate used its control over Andhra Pradesh State Beverages Corporation to secure disproportionately high orders for supply for ADPL from the outset, while genuine and popular brands were suppressed. It said the company emerged as a major player in the supply chain despite lacking production capacity of its own.Funding trailInvestigators alleged that ADPL was floated at the behest of the cartel’s ‘principal kingpin’ Kessireddy Rajasekhara Reddy alias Raj Reddy, and former MP Vijaya Sai Reddy. The agency said the company received a cumulative infusion of 60 crore between December 2019 and September 2020. The money, the ED said, was traced from the personal accounts of Penaka Sarath Chandra Reddy, the then director of Aurobindo Pharma, and his brother Penaka Rohit Reddy. It was routed through the ICICI Bank account of ADPL director Kasichayanula Srinivas in the form of unsecured loans.While Srinivas and Muppidi Anirudh Reddy were shown as directors, the investigation alleged that they acted on the instructions of syndicate leaders. The ED also alleged that ADPL functioned as a conduit for moving illicit wealth back to the cartel and ruling party functionaries. It estimated that the company paid about 135 crore in kickbacks to retain its privileged market position. According to the agency, the funds were generated by making inflated payments to vendors, including M/s Prime Services, for goods that were never supplied, with the money later taken back in cash.Gold, shell cos & realtyThe ED said the proceeds from ADPL’s operations were later layered through multiple channels. It alleged that substantial sums were transferred to gold merchants, including Mohanlal Jewellers and Rao Saheb Boorugu Mahadev Jewellers, to convert accounted money into physical gold coins and bullion.The agency also alleged that funds were routed through non-operational shell entities based in Mumbai, including Olwick Multiventures and Nysna Multiventures, to mask the trail before the money reached the cartel. It said nearly 39.8 crore was diverted into real estate, including commercial spaces in the Phoenix Group and projects such as Wilderness Ranch.
