On 8 February, Central Bureau of Investigation (CBI) sleuths arrested Gorantla Butchibabu, former Chartered Accountant of Bharat Rashtra Samithi (BRS) leader and MLC K Kavitha, in connection with the Delhi excise policy case. While Kavitha is named in Enforcement Directorate's charge sheet, she is not yet a listed accused in the same.
In the alleged scam, Aam Aadmi Party's (AAP) top leadership is accused of having tweaked and leaked Delhi Excise Policy (2021-22) to favour certain companies in exchange of hefty kickbacks. One such alleged underhand deal was struck between Vijay Nair, communication head of AAP, and South Group, that allegedly included K Kavitha and Andhra Pradesh's YSR Congress MP Magunta Srinivasulu Reddy, and P Sarath Chandra Reddy of Aurobindo Pharma, among others.
What was Butchibabu's alleged role in the the excise case?
As per the ED charge sheet, Butchibabu was among those who negotiated with Delhi liquor businessmen on behalf of the South Group. According to ED, Butchibabu was brought in to discuss business with Sameer Mahanduru, whose Indo Spirits is now at the centre of the Delhi excise policy controversy, by Sarath Chandra Reddy of Aurobindo Pharma.
The charge sheet, quoting Mahanduru's statement, read:
"...That Sharath brought Babu on board to guide him with finance and market analysis as Buchi Babu was good with numbers..."
Butchibabu was at the heart of most discussions between the South Group and Indo Spirit's Sameer Mahanduru, the charge sheet alleges. The meetings allegedly included the ones held in Delhi's top-tier hotels and also the residence of K Kavitha in Hyderabad.
Why were these meetings held? As per the ED's case, the South Group, through Kavitha's associate Arun Pillai, held 65 percent stakes in Mahanduru's Indo Spirits, a wholesale venture, which became the exclusive wholesaler of Pernod Picard India, the country's largest liquor manufacturer. The deal between Pernod Picard and Indo Spirits was struck because of the influence of AAP's Vijay Nair, who got Rs 100 crore as kickback from South Group.
The meetings and the subsequent deals were made in May 2021, before the Delhi excise policy was made public, in July 2021.
What has Butchibabu said? While Butchibabu's arrest is being looked at a direct effort to get to K Kavitha, who is also Telangana Chief Minister K Chandrashekar Rao's daughter, the charge sheet indicates that the CA has not yet named Kavitha in his statement.
The ED charge sheet notes:
"On being asked about his interaction with Sameer Mahandru, he stated that the first meeting of him with Sameer Mahandru was a zoom call which was attended by Abhishek Boinpalli and Arun Pillai and it was initiated by Vijay Nair. Arun Pillai was introduced by Vijay Nair as part of a group having deep pockets and political connections."
However, neither Butchibabu's recorded statements, nor other accused persons' allegations against him, conclusively prove that he represented K Kavitha's interest in the alleged negotiations.
Then, why was the arrest made? The case against Butchibabu is hinged on ED's allegation that Delhi's excise policy (2020-21) was discussed with him, and other accused persons, when it was in the draft stage.
Meaning, some liquor businessmen and those associated with certain political leaders were allegedly aware of the terms of the proposed liquor policy, giving them an advantage even before the policy was published.
The charge sheet reads:
"Arun (Pillai) had told Butchibabu that Vijay Nair is the point of contact for the Delhi Liquor business; that Butchibabu had some doubts about the clauses of the draft policy and Arun said that Vijay will be able to clarify it as Vijay has been working on it; that Butchibabu met Vijay Nair in this meeting..."
K Kavitha and her party, the BRS, have not responded to the arrest.
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