BRS leader K Kavitha arrested by ED in Delhi excise policy case, being brought to national capital

New Delhi [India], March 15 : The Enforcement Directorate (ED) on Friday arrested Bharat Rashtra Samithi (BRS) MLC K Kavitha in Hyderabad in connection with the Delhi excise policy-linked money laundering case.
Kavitha was arrested after a day-long questioning followed by a raid at her Hyderabad residence.
She is being brought by an ED team here in the national capital. She would be produced before a special court in Delhi tomorrow, expectedly in the afternoon.
In the arrest order, the concerned ED investigation officer said: "I believe that Smt. Kalvakuntla Kavitha w/o Mr. D R Anil Kumar, residing at H. No. 8-2316/S/H, Road No 14, Banjara Hills, Hyderabad, Telengana-500034 has been guilty of an offence punishable under the provision of Prevention of Money Laundering Act, 2002 (15 of 2003)."
"Now, therefore, in exercise of the power conferred upon me under sub section (1) of section 19 of the Prevention of Money Laundering Act, 2002 (915 of 2003), I hereby arrest the said Smt. Kalvakuntla Kavitha at 05.20 pm on 15.03.2024 and she has been informed of grounds for arrest. A copy of the grounds of arrest (containing 14 pages) have been served upon her."
The action comes almost two months after the ED issued summons to the 45-year-old daughter of former Telangana CM and BRS chief K Chandrashekhar Rao.
She was questioned thrice in this case last year and the central agency recorded her statement under the Prevention of Money Laundering Act (PMLA).
The BRS MLC has asserted in the past that she had done nothing wrong and alleged that the BJP-led central government was "using" the ED as BJP could not gain "backdoor entry" into Telangana.
Earlier, the Central Bureau of Investigation had also questioned Kavitha in this case. The ED case of money laundering was filed taking cognisance of the CBI FIR.
According to ED, Hyderabad-based businessman Arun Ramchandra Pillai, who was arrested last year in the case, "is one of the key persons in the entire scam involving payments of huge kickbacks and formation of the biggest cartel of the South Group".
"South Group" comprises Telangana MLC Kavitha, Sarath Reddy (promoter of Aurobindo Group), Magunta Srinivasulu Reddy (MP, Ongole), his son Raghav Magunta, and others, the probe said. The South Group was being represented by Pillai, Abhishek Boinpalli and Butchi Babu, the federal agency said in its investigation.
Pillai along with his associates was allegedly coordinating with various persons to execute the political understanding between the South Group and a leader of Aam Aadmi Party (AAP), the probe agency said.
Pillai has been accomplice and was involved in the kickbacks from the South Group and the recoupment of the same from the businesses in Delhi, according to ED.
The ED had earlier said that the South Group "gave kickbacks of Rs 100 crore" to AAP leaders.
Pillai is learnt to be 32.5 per cent partner in Indo Spirits, which had got an L1 licence. Indo Spirits is a partnership firm of Arun (32.5 per cent), Prem Rahul (32.5 per cent) and Indospirit Distribution Limited (35 per cent), wherein Arun and Prem Rahul represented "the benami investments of Kavitha and Magunta Srinivasulu Reddy and his son Raghava Magunta", according to the probe agency. .
In this partnership firm, Pillai represented the interests of Kavitha, the ED added.
ED has filed its first chargesheet in the case. The agency said it has so far undertaken nearly 200 search operations in this case after filing FIR taking cognisance of a CBI case which was registered on the recommendation of the Delhi Lieutenant Governor.
The CBI inquiry was recommended on the findings of the Delhi Chief Secretary's report filed in July showing prima facie violations of the GNCTD Act 1991, Transaction of Business Rules (ToBR)-1993, Delhi Excise Act-2009, and Delhi Excise Rules-2010, officials had said.
The ED and the CBI had alleged that irregularities were committed while modifying the Excise Policy, undue favours were extended to licence holders, the licence fee was waived or reduced and the L-1 licence was extended without the competent authority's approval. The beneficiaries diverted "illegal" gains to the accused officials and made false entries in their books of account to evade detection, the probe agencies said.
As per the allegations, the Excise Department had decided to refund the Earnest Money Deposit of about Rs 30 crore to a successful tenderer against the set rules. Even though there was no enabling provision, a waiver on tendered licence fees was allowed from December 28, 2021, to January 27, 2022, due to COVID-19, the probe agency said and there was alleged loss of Rs 144.36 crore to the exchequer.