Vijayawada: The SIT remand report of Andhra Pradesh liquor scam suspect Booneti Chanakya, alias Prakash, names YSRCP president and ex-CM Y S Jagan Mohan Reddy as the “final recipient” of kickbacks from distilleries across the state.
The alleged racket started in 2019 and was meticulously operated through a network that the SIT report says was controlled by Jagan’s aide and prime accused K Rajasekhar Reddy, alias Raj Kasireddy. Chanakya, a close associate of Kasireddy, played the “central role” in the syndicate.

SIT describes the alleged scam as a case of “state capture”, with political clout being employed to “loot” the state’s liquor industry.
The remand report states that distilleries were allegedly coerced into paying up to 20% commission on payments released by Andhra Pradesh State Beverages Corporation Ltd. Failure to comply would result in their supply orders being withheld, it alleges.
A meeting in a Hyderabad hotel allegedly involving YSRCP functionary Sajjala Sridhar Reddy has been identified as the origin of what the SIT report terms a “coercive” policy, with distillers being warned that they would be blacklisted if they didn’t route supplies through the designated channels.
The remand report, purportedly based on evidence and statements of key witnesses, including Dodda Venkata Satya Prasad, former special officer at APSBCL, alleges that Chanakya collected cash on behalf of the syndicate.
Investigators say Rs 50-60 crore in kickbacks was allegedly collected each month and laundered through hawala operators in Hyderabad, Mumbai, and Delhi. These transactions were masked using fake GST invoices for non-existent promotional goods, gold coins, and garments, while VPNs and international virtual numbers helped avoid detection, the report states.
SIT also alleges that the money trail leads from Rajasekhar Reddy to senior YSRCP functionaries, including former Rajya Sabha member V Vijayasai Reddy, YSRCP MP PV Mithun Reddy, YS Anil Reddy, Bharati Cements’ Govindappa Balaji, and finally to Jagan.
The remand report identifies Chanakya as the kingpin, having full knowledge of how kickbacks were allegedly collected, routed and distributed, making his custodial interrogation pivotal to the probe.
It alleged that beyond financial irregularities, the scam has had a profound impact on the state’s liquor business.. Brands associated with the syndicate allegedly benefited from increased promotion and shelf space. In contrast, some reputed brands were phased out. APSBCL data shows that the brandy sales of a reputed firm dropped from 22.7 lakh units in 2018–19 to just five units in 2023–24. The sale of another leading whisky brand declined from over 20 lakh units to seven, and a famous beer brand’s sales shrank from over one crore units to 11.8 lakh in the same period.
Forensic audits, analysis of encrypted communications, and tracking of hawala networks are underway, the remand report said.
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**GFX:**
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**Liquor Syndicate Scam – Key Findings from Investigation**
– **Communication Tactics to Evade Detection:**
– Used VPNs, virtual/international phone numbers (including +1 and +44 numbers), and apps like Signal.
– Aim: avoid leaving digital footprints.
– **Extortion Tactics Post Payment:**
– Prakash regularly called distilleries after payments from APSBCL.
– Demanded kickbacks in cash within 2 days.
– Only distilleries complying with kickbacks received further OFS (Order for Supply).
– **Monthly Kickbacks Volume:**
– Estimated ₹50–60 crore collected every month.
– **Cash Diversion Tactics:**
– Kickbacks routed via:
– Bullion traders and gold merchants using fake GST bills.
– Cash transferred back after deducting commission.
– In some cases, physical gold supplied to accused.
– **Fake Invoices & Shell Transactions:**
– Fabricated promotional expenses (linen, gold coins etc.).
– Waybill and toll gate checks revealed goods never transported.
– Transactions routed through shell companies and real estate firms linked to associates.
– **Hawala Transfers:**
– Money moved using hawala networks in Mumbai, Delhi, and Hyderabad.
– **Total Suspicious Transactions:**
– Nearly ₹300–400 crore flagged from bank statements of distilleries linked to gold merchants.