The special investigation team (SIT) of the Andhra Pradesh police, probing the ₹3,500 crore liquor scam that allegedly took place during the previous YSR Congress Party regime between 2019 and 2024, has revealed a direct link to the former Chief Minister YS Jagan Mohan Reddy.
In a 124-page supplementary charge sheet filed before the Anti-Corruption Bureau (ACB) court in Vijayawada, the SIT said that all key decisions with regard to the change of excise policy were taken by key functionaries in the government with total approval from then chief minister.
The SIT explained in detail, quoting relevant note files, how the former Chief Minister had taken specific decisions to turn the liquor trade into a royal route for illegal earnings, and how appointments were made in violation of senior officials’ recommendations.
It claimed that Jagan was actively involved at various stages of the scam, including initiating key policy changes that allegedly created the environment for large-scale corruption.
According to the chargesheet, the groundwork was laid in June 2019, when the newly elected government decided to take over liquor retailing from private traders. On 1 October 2019, a new liquor policy came into force.
Also read: Police bust staff-led money laundering in Andhra liquor scam
The chargesheet alleges that Jagan personally directed several operational aspects of the policy— from deciding the locations of shops to dictating infrastructure provisions, staff arrangements, and transportation charges.
The Andhra Pradesh State Beverages Corporation Ltd (APSBCL) was tasked with opening 3,500 government-run liquor outlets. On 30 July 2019, the corporation sent a note to the Chief Secretary outlining its plan, which was signed by the Chief Minister on 16 August.
The SIT stated that Vasudeva Reddy, accused number two and D Satya Prasad, accused number 3, were appointed to strategic positions in APSBCL. Vasudeva Reddy was brought in on deputation as Managing Director of APSBCL on 13 September 2019, and later became Commissioner of Distilleries and Breweries. Satya Prasad was appointed as Special Officer in APSBCL.
Both appointments, the SIT alleges, were made at Jagan’s behest. The two are accused of facilitating irregularities in procurement, payments, and licensing— irregularities that went unchecked despite being known within government circles.
Pressure from CMO officials
The chargesheet also records the testimony of Special Chief Secretary Rajat Bhargav, who told investigators that CMO officials Dhanunjay Reddy and Krishna Mohan Reddy pressured him on matters linked to APSBCL operations.
This, according to the SIT, illustrates the extent of involvement from the Chief Minister’s inner circle.
The first chargesheet had identified Kesireddy Rajashekar Reddy, then IT Advisor to the CM as the accused number one and the mastermind. He allegedly dismantled the automated “Order for Supply” system for liquor procurement and replaced it with a manual process, enabling manipulation and favouritism. Loyalists were placed in key positions to control procurement and distribution, while kickbacks were routed through a network of aides, shell firms, and overseas channels.
The SIT estimated that ₹3,500 crore was siphoned off between 2019 and 2024. Of this, around ₹250–300 crore allegedly went into YSRCP’s election campaigns, while parts of the proceeds were invested in properties and businesses in Dubai and African countries.
Among those already arrested was YSRCP MP PV Midhun Reddy, who the SIT labels a “core conspirator” involved in coordinating kickback flows. His arrest has drawn sharp criticism from the YSRCP leadership, which claims the entire investigation is politically motivated and intended to discredit the opposition ahead of future elections.
Jagan dismisses charges
Jagan Mohan Reddy has dismissed the allegations as baseless, accusing the Telugu Desam Party-led state government of using investigative agencies to target political rivals.
“This is nothing but a conspiracy to tarnish our party and silence dissent,” he said in a recent statement.
The Enforcement Directorate (ED) has also stepped in, registering a case under the Prevention of Money Laundering Act (PMLA) in May 2025. The ED is examining the alleged laundering of ₹3,200–3,500 crore linked to the scam, and has issued summons to several officials and business associates close to Jagan.
The ACB Court is yet to take cognisance of either chargesheet. Once it does, the trial process will begin, which is expected to be lengthy and politically charged, given the profile of those named and the scale of the alleged corruption.
The SIT has indicated that further supplementary chargesheets may follow as it continues to unravel the complex financial web.
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