The Serious Fraud Investigation Office (SFIO) has initiated a probe into alleged violations of company law by several firms connected to the Andhra Pradesh liquor scam, adding a corporate fraud dimension to the ongoing investigations by the Andhra Pradesh police and the Enforcement Directorate (ED). The probe is examining entities such as Adan Distilleries, Leela Distilleries, and UV Distilleries, which, according to the ED attachment order, were operated under the effective control of a liquor syndicate and were allotted disproportionate business volumes.
Fund Diversion Allegations
According to sources in the Ministry of Corporate Affairs and the ED attachment order, Adan Distilleries (ADPL), linked to Kasichayanula Srinivas and Muppidi Anirudh Reddy, was floated at the behest of Kessireddy Rajasekhara Reddy and V Vijaya Sai Reddy. Despite lacking manufacturing infrastructure, the firm conducted business worth Rs 732 crore between May 2020 and December 2022 by leasing production facilities. The ED has alleged that ADPL functioned as a shell entity to divert funds and paid approximately Rs 135 crore as kickbacks.
Leela Distilleries (LDPL), originally owned by Nagalingam Jayamurugan and Nallannan Mathappan, was later taken over by the syndicate, with P Varun Kumar appointed as operations head. Investigators have flagged its role as a special purpose vehicle used to sustain the alleged 20% kickback mechanism through dummy directors and vendors. UV Distilleries, run by partners Teegala Upender Reddy and Dr Teegala Vijender Reddy, with operations handled by Booneti Chanakya, allegedly secured large orders from APSBCL and generated about Rs 230 crore in business. The ED has alleged that funds were siphoned off through inflated vendor payments.
Logistics Firms and Shell Entities
The probe has also widened to transportation and logistics firms, including Sigma Supply Chain Solutions and Tekkr Exports and Imports. According to the ED, these firms were awarded tenders at inflated rates and functioned as fronts, subleasing work to other syndicate-controlled entities. Funds from these operations were allegedly routed through firms such as Arroyo Services and Ezyload Network without corresponding services.
Investigators have also identified shell entities, including Prime Services, which allegedly issued fake invoices without any operational setup, and Mumbai-based firms Olwick Multiventures and Nysna Multiventures, which were used to layer funds before routing them into gold and bullion transactions. TAG Developers has been cited for routing unaccounted cash through backdated agreements.
Investment Routes Under Scrutiny
The ED has further traced alleged proceeds of crime into real estate and investment vehicles such as Eshanvi Infra Projects and ED Entertainment. These firms, linked to Raj Reddy and associates, were used to invest in residential projects and acquire immovable assets, as per the attachment order.
Sources in the Ministry of Corporate Affairs said the SFIO probe will examine compliance failures, beneficial ownership patterns, and the role of directors across these entities. The investigation is expected to focus on how company structures were used to route funds, create layered transactions, and conceal the origin of alleged proceeds linked to the liquor policy.
