Delhi Excise Policy Money Laundering Case: KCR's Daughter K Kavitha Interrogated for Over 10 Hours

K Kavitha, the daughter of Telangana Chief Minister K Chandrashekar Rao, was interrogated by the Enforcement Directorate (ED) for more than 10 hours in a Delhi excise policy-linked money laundering case on March 20, 2023. The Bharat Rashtra Samithi (BRS) leader was summoned again on March 21 for questioning by the agency. The 44-year-old Member of the Legislative Council (MLC) was first questioned in the case on March 11 and was again summoned on March 16, but she had skipped the deposition citing her pending plea before the Supreme Court for relief against the ED action in the case.

During Kavitha's initial questioning on March 11th, she was presented with statements from Arun Ramachandran Pillai, a Hyderabad-based businessman who was arrested and allegedly had close connections with her. These statements, recorded under the Prevention of Money Laundering Act (PMLA), were used to question Kavitha further. The ED alleged that Pillai, who represented the South Group, an alleged liquor cartel linked to Kavitha and others, paid kickbacks amounting to about ₹100 crores to the Aam Aadmi Party (AAP) to gain a larger share of the market in the national capital under the now-scrapped Delhi excise policy for 2020-21. The South Group comprises Sarath Reddy, promoter of Aurobindo Pharma, Magunta Srinivasulu Reddy, YSR Congress MP from Ongole Lok Sabha seat in Andhra Pradesh, his son Raghav Magunta, Kavitha, and others.

During her questioning on March 20, Kavitha was face-to-face with Pillai and confronted with the statements made by her former auditor Butchibabu Gorantla. According to Pillai's remand papers, he allegedly "represented the benami investments" of Kavitha in the case. It is worth noting that Kavitha was previously questioned by the Central Bureau of Investigation (CBI) at her Hyderabad residence in connection with the same case.

Kavitha has asserted that she has done nothing wrong and alleged that the BJP-led Centre was "using" the ED as the saffron party could not gain a "backdoor entry" into Telangana. Until now, the ED has apprehended 12 individuals related to the case, such as Manish Sisodia, former deputy chief minister of Delhi and AAP leader. The agency has also documented the declaration of Butchibabu, an accountant purportedly connected to Kavitha, in which he asserted that "there existed a political understanding among K Kavitha and Chief Minister Arvind Kejriwal and the deputy chief minister (Sisodia)."

It is alleged that the Delhi government's excise policy for 2021-22 to grant licenses to liquor traders allowed cartelization and favored certain dealers who had allegedly paid bribes for it, a charge strongly refuted by the AAP. The policy was subsequently scrapped, and the Delhi lieutenant governor recommended a CBI probe, following which the ED registered a case under the PMLA.

The case highlights India's growing nexus between politicians, businessmen, and organized crime. The liquor industry, which is highly regulated, has been a hotbed of corruption for decades. Politicians often use their power to grant licenses to certain traders and favor specific brands, leading to monopolies and cartelization. The nexus between politicians and organized crime is well-known, with mafia dons often funding political campaigns and using their muscle power to influence election outcomes.