Manish Sisodia Charged Of Destroying Evidence: The 'Sophisticated Corruption' Of The Delhi Liquor Scam

The CBI on 26 February arrested Delhi Deputy Chief Minister Manish Sisodia in connection with alleged corruption in the formulation and implementation of the Delhi liquor policy for 2021-22.

Earlier, in late December 2022, the Enforcement Directorate (ED) had filed a chargesheet in the Delhi liquor scam case, outlining the methods used by the accused to generate illegal funds through the Delhi Excise Policy.

According to the investigative agency, the policy, which was formulated by the AAP government, resulted in a loss of approximately Rs 2,973 crore to the government exchequer.

The ED chargesheet goes on to say that the policy was a device designed to generate illegal funds for the party.

The Modus Operandi

The policy forced the manufacturers to select only one L1 wholesaler as their sole distributor.

The license granted to L1 wholesalers was on an application basis and the same could be granted to anyone who was eligible as per the terms and conditions of the L1 wholesalers.

However, the investigation revealed that Pernod Ricard, one of the biggest manufacturers in the country, was coerced by AAP’s communication in charge, Vijay Nair to give their wholesale distribution business to one of the accused, M/s Indo Spirits (L1 Wholesaler).

Evidence Destroyed By Manish Sisodia

The ED points to the widescale destruction of digital evidence once the scam was unearthed and sent to the investigating agency. A large number of digital devices were destroyed or altered by the individuals suspected of being involved in the case.

At least 36 accused or suspects in the excise scam are reported to have destroyed or used 170 phones.

The charge sheet states that the magnitude of evidence destruction is significant, with many accused individuals, including liquor barons, senior government officials, the Excise Minister of Delhi, Manish Sisodia and other suspects, changing their phones multiple times. The approximate value of the devices used and destroyed is estimated to be around Rs 1.38 crore.

It is noted that Mahendru himself changed or destroyed his mobile phone four times in the past five months, indicating a potential effort to destroy evidence.

Vijay Nair: The Middleman

The charge sheet outlines the central role played by Vijay Nair in exploiting the flawed Delhi Excise Policy to extract money.

Nair exerted pressure on certain wholesalers to surrender their licenses and then coerced selected manufacturers to choose wholesalers of his choice, with the goal of directing profit margins to specific individuals.

The ED said that Nair has been staying in the government residence allocated to Delhi Transport Minister Kailash Gahlot since 2020. The ED has described this practice of a public servant allowing someone else to use a government residence as a "criminal breach of trust" and has requested that the CBI take action.

Nair, on behalf of leaders of the AAP, received kickbacks totalling Rs 100 crore from a group labelled ‘South Group’.

The ‘South Group’

The 'South Group', named as such for convenience, was controlled by Telangana Chief Minister's daughter, K Kavitha and YSRCP MP, Magunta Srinivasulu Reddy among others, the ED alleged in a charge sheet.

The ED furnished the statement of businessman Sameer Mahendru, who has been accused by the agency of forming a 'super cartel'.

In a statement given to ED, Mahendru had admitted to the involvement of the South Group, which controlled a stake in Mahendru’s Indo Spirits through false representation, concealment and proxies' of individuals identified as Arun Pillai and Prem Rahul.

The group paid kickbacks in advance to the Aam Aadmi Party leaders through Nair as part of an agreement between the group and the AAP leaders.

In exchange for the kickbacks, the group reportedly gained unrestricted access, special favours, stakes in established wholesale businesses and multiple retail zones (beyond what was allowed in the policy).

Promoted Cartelisation

The Delhi Excise Policy, formulated by the AAP government, promoted the formation of cartels through back-door deals. It is accused of granting excessive wholesale profits of 12 per cent and large retail profit margins of 185 per cent and incentivised other illegal activities as part of a criminal and political conspiracy led by AAP leaders.

The 12 per cent profit margin for wholesalers is believed to have been devised as a means of extracting kickbacks (6 per cent of the 12 per cent profit margin) for AAP leaders.

State’s Revenue Restricted, Profits To Private Entities Maximised

The Delhi government implemented a system of auctioning retail licenses to private entities based on payment of lump sum license fees, which was not recommended by the expert committee.

The system allowed private entities to bid for retail zones by setting a reserve base license fee for each zone.

This model was limited in terms of state revenue but provided retailers with the opportunity to earn unlimited profits. Retailers were incentivised to increase their sales but the logic of the state earning higher duty over every liquor bottle sold was completely done away with.

Private Players Manipulated Excise Policy

In addition to these allegations, the charge sheet also accuses Mahendru of being involved in the conspiracy from the beginning, working in collusion with others to actively shape the key agenda points of the 2021-2022 excise policy in a way that was favourable to him.

It is also alleged that the Delhi Excise Policy was leaked to certain liquor wholesalers and manufacturers before its official release and that a large number of approvals were granted by excise officials outside of normal working hours or late at night.

In August of this year, Delhi Lt Governor V K Saxena had recommended that the CBI conduct an investigation into the alleged irregularities in the implementation of the Delhi Excise Policy 2021-22, which led to the Delhi government withdrawing the policy entirely.

(with inputs from PTI)

Also Read: Vijay Nair: The AAP Operator You Didn't Know About