The noose appears to be tightening around the neck of former Andhra Pradesh Chief Minister and YSR Congress Party supremo YS Jagan Mohan Reddy in the alleged Rs 3,500 crore liquor scam perpetrated during his tenure from 2019 to 2024.
A CID probe has found that the YSRCP chief was among the recipients of kickbacks from an elaborate fraud that generated Rs 50-60 crore as bribes every month between June 2019 and May 2024. This was the result of a liquor policy that allegedly favoured some hand-picked companies and suppliers.
A Special Investigation Team (SIT) of the CID, probing the case, pinned the scam on Kessireddy Raja Shekhar Reddy, an IT advisor to then Chief Minister, arrested in Hyderabad in April.
The probe revealed that the kickbacks from distilleries were handed over to the main accused Kesireddy, who allegedly channelled the money into a web of shell companies, before distributing it among others. Investigators have found that the money was funnelled to the YSRCP leaders and alleged masterminds V Vijayasai Reddy and P V Midhun Reddy, who would then transfer it to Jagan Mohan Reddy.
Midhun Reddy is the sitting YSRCP MP from Rajampet while Vijayasai Reddy is a former Rajya Sabha member who recently resigned from his seat and also quit politics.
Jagan’s name appears three times in the report, though he is not formally named among the 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.
It is possible that the SIT may summon Jagan 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.
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Already, Jagan is facing a legal battle in the alleged disproportionate assets case. He was arrested by CBI in 2012 in this case. He had spent nearly 16 months in jail before being released on bail. The case is still progressing through the courts.
Military precision
In the alleged liquor scam, the CID charge sheet said that the syndicate functioned with military precision. Statements from key witnesses, digital evidence, and financial trails suggest that a significant portion of the funds was funnelled into YSRCP’s war chest to finance the 2024 general elections, with Jagan alleged to have directed this operation through trusted aides.
The CID notes that the scale and consistency of the kickbacks point to centralised political oversight, rather than rogue actions by isolated leaders.
What is ironic is that the changes in liquor policy, introduced in 2019, were pitched as “people-friendly”. The idea was to curb alcohol consumption, shut down private liquor shops, and run all retail sales through a state-owned corporation — APSBCL (Andhra Pradesh State Beverages Corporation Limited).
To the general public, it sounded like a noble experiment in social reform. In reality, it became the perfect breeding ground for one of the most audacious corruption rackets in recent history.
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“What makes this scam truly audacious is its sheer sophistication. It wasn’t a simple bribe-for-license scheme. It was a complete capture of an entire ecosystem—policy, procurement, pricing, and retail—engineered to divert public wealth into private hands. It was a state-sponsored heist dressed up as reform,” says senior political analyst and author Ramesh Kandula.
The brilliance of the scheme lay in its structure: policy changes legalised monopoly, manual approvals legalised favouritism, and shell firms legalised laundering. Every layer added deniability.
“And with monthly targets in place, allegedly in the range of Rs 50-60 crore, this was not a scam but was a business model, running on political muscle and bureaucratic complicity,” Kandula says.
Manual control trick
Earlier, liquor procurement in Andhra Pradesh operated through an automated Order for Supply (OFS) system developed by CTel, which allocated liquor stock based on objective parameters like demand and performance. This ensured transparency — brands received orders on merit, and there was little scope for manipulation.
However, this system stood in the way of the kickback model. So, it was deliberately dismantled. The CTel software was scrapped, and the automated process was replaced with manual allocation, giving officials and political appointees absolute discretion to decide which brands would get shelf space and in what quantities. This single move changed the entire game. With manual control, the liquor trade became a closed, pay-to-play system, laying the foundation for the multi-crore scam.
The government systematically suppressed popular brands by restricting their supply. APSBCL warehouses simply stopped stocking traditional brands, forcing shops to push the new, high-margin clones. With the retail shops under the control of the government, the state-run system became a controlled funnel, ensuring every drop sold lined the pockets of a powerful nexus.
Kickbacks were allegedly fixed based on the basic price of liquor brands, ranging from Rs 150 per case for cheaper brands to Rs 600 per case for premium brands. Payments were collected every five days through associates using VPNs, international numbers, and apps like Signal to evade detection.
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