Judge Kaweri Baweja of Rose Avenue Court in Delhi placed Delhi Chief Minister Arvind Kejriwal in ED custody until March 28, one day after his arrest in the Delhi liquor policy scandal. TNG Times has obtained access to the plea that the Enforcement Directorate submitted to the court requesting his 10-day detention. The application provides essential information about the case, including Kejriwal’s direct involvement in the scam.
According to ED, the liquor wholesalers who obtained L-1 licences under the now-scrapped scheme produced fake accounting entries to maintain their records and gave merchants credit notes to use the money to pay officials. Manish Sisodia’s close associates, Amit Arora and Arjun Pandey, were actively involved in managing and directing the funds obtained from the spirits merchants to government employees.
Banking transactions provided by the ED demonstrate how funds from L-1 licence holders were transferred to individuals connected to government officials in Delhi.
The Excise Policy of Delhi
ED explains the case’s history and the new excise policy implemented to stop the sale of fake and untaxed alcohol, improve consumer satisfaction, and streamline the former excise regime’s intricate regulations. Its goals included preventing monopolies, guaranteeing fair access to the alcohol supply, maintaining responsibility, and combating bootlegging and smuggling, among other things.
An entity with an L-1 wholesale licence cannot be a manufacturer, vineyard, brewery, bottling facility, etc., anywhere in the nation, directly or through sister entities. This is one of the primary characteristics of the new excise police. In a similar vein, the policy stated that a wholesaler could only provide to holders of zonal retail licences, such as those with permits for L-7Z, L-7V, and L-7SP1, and that a wholesaler could not directly or indirectly possess any retail permits.
The Excise Department granted retail permits for 32 zones through a published tender, while the department granted wholesale licences based on applications.
According to the rules, syndicate development is possible if the same firms possess manufacturing, retail, and wholesale licences. This could result in unethical trading activities, such as overcharging or pushing specific brands. To prevent market capture and cartelization, it was determined that no entity would be assigned more than two zones.
The Con
On the other hand, the new excise policy violated the policy’s guidelines from the start. Investigations revealed that single entities effectively dominated manufacturing, wholesale, and retail entities in the spirits market, and cartels had emerged. The ED claims the cartels included licences for retail zones, manufacturers, and wholesalers. “A vast array of entities, individuals, and other relationships, such as proxy ownership, sleeping partners, concealed investments, etc., comprise every cartel,” the ED went on.
CM Arvind Kejriwal “is the kingpin and key conspirator of the Delhi Excise Scam in collusion with Ministers of Delhi Govt, AAP leaders and other persons,” according to the Enforcement Department, speaking about his involvement in the scandal. According to the agency, Kejriwal was part of a plot to create the Excise Policy 2021–22 in a way that would reward particular individuals and demand bribes from liquor industry players in return for the policy’s favours.
Arvind Kejriwal, the AAP’s convenor and ultimate decision-maker, is further accused by the ED of using profits of crime in the party’s Goa election campaign.
ED provides specifics about Kejriwal’s involvement in creating the Excise Policy 2021–2022, stating that it was written with the South Group’s benefits in mind. The ED claims that Manish Sisodia, Vijay Nair, and South Group members-representatives were intimately involved in creating the police.
The statement of C. Arvind, Manish Sisodia’s secretary at the time, who stated that Sisodia had summoned him to the chief minister’s house in March 2021 and given him a thirty-page paper containing a draft Group of Ministers report on excise policy, is cited by the ED as proof of these claims. Satyender Jain, Manish Sisodia, and Arvind Kejriwal were at this meeting. Sisodia informed C Arvind that the draft report he had received should serve as the basis for the final GoM report.
According to the draft, agents or private companies of manufacturers should be granted wholesale licences. A single wholesale licensee might serve as a distributor for many manufacturers, with a fixed wholesale profit margin of 12%. These items contradicted the prior policy decisions and were never mentioned in the GoM sessions.
The report was completed as instructed by the secretary and turned in; the Delhi government then finalised it. According to ED, Buchi Babu, the CA of BRS leader K Kavitha, has disclosed that Arun Pillai was collaborating with Vijay Nair on creating the policy and providing provisions to give preference to K Kavitha. Kejriwal and Sisodia also employed Nair for the same reason. The WhatsApp communications taken from Buchi Babu’s cell phone attest to this. Two days before the Excise Policy document’s finalisation by the GoM and the Delhi government’s Council of Ministers, some of the policy’s clauses were discovered in the messages.
Viyay Nair forwarded these sections of the forthcoming policy to Budhi Babu and Arun Pillai, who informed ED. According to ED, the conversations also demonstrate that Nair suggested favours in the South Group policy.
Bribes to finance elections
In the remand application, the ED claims that Arvind Kejriwal was not only responsible for creating the policy intended to benefit particular firms but also aggressively demanded payment in exchange for this favour. YSR Congress MP Magunta Srinivasulu Reddy told ED that they had been in the spirits business for 71 years in South India; thus, he decided to apply for a licence when he realised that Delhi was privatising the industry.
When Telangana Chief Minister K Chandrasekhar Rao’s daughter K Kavitha approached him, they discussed giving the AAP 100 crore in exchange for a licence. She informed him that her team was already working on the problem in Delhi. Following their friendly conversation, he met Arvind Kejriwal in Delhi, where the chief minister stated that his government invites everyone to conduct business there. Arvind Kejriwal informed him during the meeting that K Kavitha would have a detailed conversation with him about it.
After seeing Reddy, Kavita informed him that Kejriwal had spoken to her about him and requested that he set up ₹50 crore for the AAP to fight in the elections out of the ₹100 crore required. Reddy ordered his son, Raghav Magunta, to handle Kavitha because he was too busy working as an MP. After a while, Magunta declared that he had given K Kavitha ₹30 crores. Subsequently, Kavita’s assistants, Abhishek Boinpalli and Buchi Babu, received ₹25 crore from Raghav Manuta.
Raghav Manuta has also verified this, stating that he fulfilled the deal between K Kavitha, himself, and his father, Magunta Srinivasulu Reddy, by giving ₹25 crore in cash to Abhishek Boinpally and Buchi Babu. He said the money was paid in two installments of ₹ ten crore on March 28, 2021, and ₹15 crore in June 2021. Notably, Raghav Manuta, the son of Magunta Srinivasulu Reddy, has also turned approver.
Raghav said Vijay Nair was liaising with K Kavitha’s team and Arvind Kejriwal, Manish Sisodia, and their colleagues on the new excise policy.
Aurobindo Pharma’s director, Sarath Reddy, has also disclosed information regarding the fraud. He claimed to have met Arvind Kejriwal at the home of Vijay Nair, who lived close to the Delhi Chief Minister’s residence. Speaking about the new policy and assuring him that it would benefit both parties, Kejriwal requested him to put his trust in Nair regarding liquor licencing.
According to the ED, Vijay Nair does not hold an official position. Instead, he served as a middleman, broker, or liaison for the top AAP leaders, particularly Arvind Kejriwal, to obtain bribes or kickbacks from various parties involved in the Delhi liquor industry in exchange for favourable changes to the Delhi excise laws. Nair went so far as to threaten to withhold favours from those who disagree.
According to Vijay Nair’s disclosure, he resided in a government home without formal authorization, and Cabinet Minister Kailash Gehlot was officially given the house next to Arvind Kejriwal’s mansion. Furthermore, Vijay Nair worked out of Arvind Kejriwal’s camp office. Nair was the one who, on behalf of Arvind Kejriwal and the AAP, accepted ₹100 crore from the South Group.
The members of the South Group received payments in return for control over Indo Spirits, a distributor, retail zones, and Pernod Ricard’s company. Despite receiving numerous complaints and breaking the Excise Policy 2021–22, they were given an L1 licence, according to the ED.
Using bribe money
The chief minister of Delhi was also using funds that she had accepted as bribes from the spirits cartel. Evidence has been discovered by the ED indicating that ₹45 crores of the bribe money was used for the AAP’s Goa election campaign. Mis Chariot Productions, the company that the AAP hired to handle the outdoor campaign in Goa, achieved this by paying vendors “part cash, part bill.” The vendors billed only a portion of the amount owed; the remaining balance was paid in cash.
In conversations between Sparks Entertainment, a vendor, and Chariot that ED obtained, the vendor was informed that cash and billing payments would be accepted. The merchants used the Hawala way to get the cash part, but they received the billed amount through normal means. Islam Qazi of Grace Advertising acknowledged that Hawala operators in Malad, Mumbai, were the source of his ₹6.29 crore payment. The ED remand application lists additional vendors who received cash payments from AAP through hawala.
Documents collected during an Income Tax department raid on Angadiya operator R Kantilal’s Goa office disclosed that Hawala was used to move about ₹45 crore to Goa. The CBI also looked into the Hawala train, which specified this sum in the agency’s charge sheet.
A Chariot Productions employee has also disclosed that he gave three individuals involved in the AAP’s Goa election campaign large sums of money. Approximately ₹12 Crore from Ashok Chandu Bhai of Asheel Corporation, ₹7.1 Crore from Devang Solanki of K S Enterprise, ₹16 Crore from Kirti Amba Lal, ₹7.5 Crore from Neelkanth, and ₹2 Crore Ma Ambey were the four pathways via which the money arrived in Goa, according to the investigative directorate. In their recorded statements, the pertinent parties have attested to the same.
In addition to agencies, people involved in the AAP campaign have reported receiving payments in cash. Cash was used to pay survey workers, assembly managers, area managers, and other employees. Delhi AAP MLA Durgesh Pathak and Vijay Nair employed them. Furthermore, an AAP candidate in the Goa poll has acknowledged getting paid for election-related costs.
Crime in the PMLA
According to the ED, the Aam Aadmi Party (AAP) is the primary recipient of the criminal earnings from the Delhi Liquor Scam. In addition to using ₹45 crore for the Goa elections, the party and Arvind Kejriwal violate PMLA Section 70 for money laundering.
According to Section 70 of the PMLA, “Everyone who, at the time the contravention was committed, was in charge of and responsible to the company, for the conduct of the business of the company as well as the company, shall be deemed to be guilty of the contravention and shall be liable to be proceeded against and punished according.” This also applies to companies that violate any rule, direction, or order under this Act.
The Election Department (ED) has provided a detailed explanation of how the AAP meets the legal definition of a “company” and how Arvind Kejriwal, as National Convenor and member of the National Executive, has ultimate responsibility for the monies used for election costs, including their creation.
According to the testimony of the witnesses, Arvind Kejriwal was and still is the leader of the AAP and is in charge of all of its primary initiatives. He was also a founder member and participated in formulating the party’s strategy. According to the ED’s remand application, “He is also involved in the demand for kickbacks which have, among other things, generated further proceeds of crime.” The ED has stated that as he was in control of the party when the crime occurred, he will be found guilty of charges punishable under section 4 of the PMLA and will be subject to prosecution and punishment under section 70 of the PMLA.
According to the CBI, Kejriwal knew about the PMLA breach and did nothing to stop it from happening. It is established that Sh. Arvind Kejriwal, the AAP’s supreme leader, was inherently involved in creating policies, the kickback system, and the eventual use of the money obtained from these crimes, including their conspiracy, the ED said in court. Therefore, in addition to his role in his capacity, he is also accountable for the use of the PoC of Rs. 45 crore in the AAP’s Goa election campaign under Section 70(1) of the PMLA, 2002.
The court gave the ED six days, until March 28, to have custody of Arvind Kejriwal, although the ED had requested ten days. This will be a significant marathon of surprises and a Pandora’s box of wrongdoings.