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Delhi excise scam: ED says aide represented K. Kavitha’s interests, calls her for questioning

In its remand application for businessman Arun Pillai, ED says he represented interests of KCR’s daughter in his firm. BRS leader says ‘intimidation tactics’ won't deter her party.

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New Delhi: Hyderabad-based businessman Arun Ramachandra Pillai, one of the prime suspects in the alleged Delhi Excise Policy scam, represented the “benami investments” of K. Kavitha, the daughter of Telangana Chief Minister K. Chandrasekhar Rao, the Directorate of Enforcement has said in its remand report. 

In its remand report filed Tuesday — just hours after his arrest — the Enforcement Directorate (ED) claimed that Pillai had represented Kavitha’s “benami interests” in a firm in which he’s a partner.

ThePrint has a copy of this report.

Pillai, a Hyderabad-based businessman and a close aide of  Kavitha — a leader of Bharat Rashtra Samithi and a member of the Telangana Legislative Council — was arrested Tuesday. 

The ED has also summoned Kavitha for questioning on 9 March. In her response to the summons, the BRS leader said Wednesday that as a “law-abiding citizen”, she would “fully cooperate” with the investigation.

“However, due to the Dharna and prefixed appointments, I’ll seek legal opinions on the date of attending it,” Kavitha said Wednesday following the summons. 

Kavitha was referring to a protest her party had planned at Delhi’s Jantar Mantar Thursday to demand that the Modi government introduce the Women’s Reservation Bill.

Sources in the BRS, however, told ThePrint that Kavitha had already consulted her father, Telangana CM KCR, on what to do next. 

In her statement Wednesday, Kavitha said: “I would like the ruling party at the Centre to know that these tactics of intimidation against the fight and voice of our leader, CM KCR, and against the entire BRS party will not deter us”. 

The alleged excise scam, which ED says involves irregularities in Delhi’s now rolled-back liquor excise policy, led to the arrest of Manish Sisodia, a senior leader of the Aam Aadmi Party and the former Delhi deputy chief minister. 

The ED has accused AAP leaders of having received bribes to the tune of Rs 100 crore from what it refers to as the “South Group”.  Apart from Pillai and Kavitha, ED claims this “group” also includes Aurobindo Pharma promoter Sarath Reddy,  YSRCP Ongole Member of Parliament Magunta Srinivasulu Reddy (MSR), and his son Magunta Raghava Reddy. 

Sisodia held the excise portfolio at the time of the alleged scam. 

So far, 11 people, including Pillai, Sarath Reddy, AAP’s communications in-charge Vijay Nair, and Raghava Reddy, have been arrested in connection with the case. 

In December, the Central Bureau of Investigation (CBI) had called Kavitha for questioning. 


Also Read: Don’t give clean chit to Sisodia but see the timing. A national scandal is being covered


‘Represented her interests’

According to the Benami Transactions (Prohibition) Act of 1988, a benami transaction is one in which property is transferred to one person for a consideration paid or provided by another person. 

The law holds benami transactions as illegal and provides a punitive punishment — three years of jail or fine or both.   

In its latest remand application, the ED called Pillai one of the key suspects in the case, saying that he was instrumental in creating a cartel to recover the money paid in kickbacks.

In its remand application, ED called Pillai a key person to the case, claiming that he and others created a “manufacturer-wholesale-retailers” nexus.

“One of the major objectives of the excise policy was to not allow (the) formation of any monopoly or cartel and to allow the responsible players in the industry to carry out trade transparently without resorting to any proxy model,” the ED said in its report.

The ED claims Pillai is a partner in a firm called ‘Indospirits’, which obtained an “L-1” — a licence for wholesale distribution. For context, according to the Delhi government’s excise rules, the L-1 licence is only given to “high-end professional” entities that have at least five years of wholesale distribution experience in the union territory. 

According to ED, Pillai owns 32.5 per cent of the firm and represented Kavitha’s “interests” in it — that is, he was her “benami”. 

The ED claims that in exchange for the kickbacks, Indospirits was made one of the most profitable wholesalers in Delhi. It also claims that the policy was manipulated to increase the profit margin for wholesalers so half of it can be extracted as kickbacks.

“Arun Pillai and (another) represented (the) benami investments of K. Kavitha and Magunta Srinivasulu Reddy and his son Raghava Magunta,” ED said in its report. “Arun Pillai, along with his associates Abhishek Boinpally and Buchi Babu, on behalf of the South Group, orchestrated the whole scheme of forming a cartel of the manufacturers, wholesalers, and retailers who controlled more than 30 per cent of the whole liquor business in Delhi,”

Abhishek Boinpally and Buchi Babu, whom ED claims are part of the “South Group” are chartered accountants and are considered part of Kavitha’s inner circle. They have also been arrested in connection. 

“In the partnership (Indospirits) firm, Arun represents the interests of Kavitha, Arun Pillai, and others have revealed in the statement. He (Arun Pillai) on paper invested 3.40 crore rupees in Indospirits. As revealed in the investigation, out of this amount, 1 crore rupees was given to Arun Pillai on instructions of Kavitha,” the report said.

(Edited by Uttara Ramaswamy)


Also Read: ‘Rs 100 cr kickbacks, cartels & Facetime call with Kejriwal’: ED chargesheet in liquor scam case


 

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