Bharat Rashtra Samithi MLC Kalvakuntla Kavitha, the daughter of former Telangana Chief Minister K Chandrashekar Rao, was arrested by the Enforcement Directorate on March 15 after allegations that she was involved in money laundering in the Delhi excise policy case.  Delhi Chief Minister Arvind Kejriwal faces imminent arrest in the case, while Delhi’s former Deputy Chief Minister Manish Sisodia has been in prison for the same case since February 2023. 

The electoral bonds data made public on Thursday evening throws up an interesting detail in the case. It turns out that a company – whose director is Kavitha’s co-accused, and went on to turn approver in the case – had donated Rs 5 crore to the Bharatiya Janata Party, just five days after he was arrested by the Enforcement Directorate.

Hyderabad-based businessman P Sarath Chandra Reddy is one of the directors of Aurobindo Pharma Ltd, founded by his father PV Ram Prasad Reddy. He was arrested by the ED in the liquor scam case on November 10, 2022. On November 15, Aurobindo Pharma bought electoral bonds worth Rs 5 crore. All of them were encashed by the BJP soon after, on November 21, 2022. 

In all, the company bought electoral bonds worth Rs 52 crore, of which Rs 34.5 crore went to the BJP. Aurobindo also donated Rs 15 crore to Bharat Rashtra Samithi and Rs 2.5 crore to the Telugu Desam Party. 

The ED accused Sarath of playing a key role in moving kickbacks in the liquor licensing process in Delhi, when the policy was implemented for a few months by the AAP government in 2021-22.

Sarath and Kavitha are among several individuals from the Telugu states whom the ED has referred to as the ‘South Group’. The ED has alleged that the individuals comprising the South Group gave kickbacks worth about Rs 100 crore to the AAP through Vijay Nair, formerly in charge of the party’s communications. The agency alleged that this amount was paid to gain control over the liquor business in Delhi, and that the money was used by AAP during the 2022 Goa assembly elections.

On June 1, 2023, a Delhi court allowed Sarath to turn approver in the case. Two other members of the South Group – YSRCP Ongole MP Magunta Sreenivasulu Reddy and his son Raghav – also turned approvers in the case, as did Delhi-based businessman Dinesh Arora. 

In the past, Sarath’s name has also been associated with YSRCP chief and Andhra Pradesh Chief Minister YS Jagan Mohan Reddy. In 2012, Sarath was named in a CBI chargesheetin connection with a quid pro quo case against Jagan over a land sale agreement with Andhra Pradesh Industrial Infrastructure Corporation in 2006 that allegedly benefitted Trident Life Sciences Ltd when Sarath was its managing director. The trial in the case is ongoing. 

The liquor policy was introduced by the AAP government in Delhi in November 2021, and was scrapped in July 2022. The Central Bureau of Investigation registered a case over alleged irregularities in the policy, saying it allowed for cartelisation through preferential treatment of certain liquor dealers. It alleged that these preferred dealers had paid bribes worth Rs 100 crore for the liquor licences. The ED later registered a case against the same accused under the Prevention of Money Laundering Act. 

The ED started looking into Kavitha’s alleged involvement in the case after it arrested Hyderabad-based businessman Arun Ramchandran Pillai on March 9, 2023. The ED said that Pillai had confessed to representing Kavitha’s interests in the liquor policy case. 

This report is part of a collaborative project involving three news organisations – Newslaundry, Scroll, The News Minute – and independent journalists.

Project Electoral Bond includes Aban Usmani, Anand Mangnale, Anisha Sheth, Anjana Meenakshi, Ayush Tiwari, Azeefa Fathima, Basant Kumar, Dhanya Rajendran, Divya Aslesha, Jayashree Arunachalam, Joyal, M Rajshekhar, Maria Teresa Raju, Nandini Chandrashekar, Neel Madhav, Nikita Saxena, Parth MN, Pooja Prasanna, Prajwal Bhat, Prateek Goyal, Pratyush Deep, Ragamalika Karthikeyan, Raman Kirpal, Ravi Nair, Sachi Hegde, Shabbir Ahmed, Shivnarayan Rajpurohit, Siddharth Mishra, Sumedha Mittal, Supriya Sharma, Tabassum Barnagarwala and Vaishnavi Rathore.