The Enforcement Directorate (ED) has arrested Kesireddy Raja Shekhar Reddy and former Andhra Pradesh State Beverages Corporation Limited (APSBCL) Managing Director Dontireddy Vasudeva Reddy in a money laundering case linked to alleged irregularities in liquor transportation tenders that caused a reported loss of ₹195.33 crore to the state exchequer.
According to an ED press release issued on June 12, the agency conducted search operations on June 11 under the Prevention of Money Laundering Act (PMLA) at five locations in Hyderabad related to the Andhra Pradesh liquor transportation case. Searches at premises linked to Kesireddy Raja Shekhar Reddy, Dontireddy Vasudeva Reddy, Vijaya Narasimha Reddy, Vallu Sandeep, Karumuri Nageswara Rao and Karumuri Sunil Kumar resulted in the seizure of a luxury car, costly watches valued at ₹94.5 lakh and unaccounted cash. The agency also recovered and seized documents relating to suspected joint venture arrangements, unaccounted cash transactions and property records.
Registration Begins for FutureCrime Summit 2026, India’s Largest Cybercrime Conference
ED Alleges Tender Conditions Were Tailored
The investigation stems from an FIR registered by the Andhra Pradesh CID under provisions of the IPC and the Bharatiya Nyaya Sanhita based on a complaint from the Additional Secretary to the Government of Andhra Pradesh (Vigilance).
According to the ED, the liquor transportation tender conditions of APSBCL were deliberately modified and tailored in favour of selected entities, including M/s Sigma Supply Chain Solutions Pvt. Ltd. (SSCSPL) and subsequently M/s Prasaad Transports. The agency alleged that these entities acted as front companies while operational and financial control remained with persons associated with Kesireddy Raja Shekhar Reddy, Dontireddy Vasudeva Reddy and their associates.
The ED further alleged that a liquor cartel created a mechanism to generate unlawful gains through transportation contracts between depots and retail liquor outlets across Andhra Pradesh.
Alleged Inflation of Transport Rates Under Scanner
The agency claimed that Kesireddy Raja Shekhar Reddy, Tukekula Eswar Kiran Kumar Reddy and Anjani Kumar, acting in conjunction with former APSBCL Managing Director Dontireddy Vasudeva Reddy, influenced the award of liquor transportation contracts at rates substantially higher than prevailing market rates.
According to the investigation, transportation charges were allegedly increased from an average district-level rate of about ₹19.68 per carton box to as high as ₹35.57 per carton box. The ED alleged that this arrangement generated significant illegal profits and that a parallel mechanism was created for allotting sub-contracts to local political leaders and related entities.
The agency also alleged that SSCSPL was used as a front entity during the tender process, while the actual execution and operational control of transportation work remained with Tukekula Eswar Kiran Kumar Reddy and associates operating under the supervision of Kesireddy Raja Shekhar Reddy.
Former APSBCL MD and Ex-IT Adviser Arrested
The ED alleged that Dontireddy Vasudeva Reddy, while serving as Managing Director of APSBCL, dismantled the existing district-level transportation mechanism and replaced it with a centralised state-wide transportation policy without obtaining required approvals. The agency further alleged that he furnished false and misleading recommendations to justify the shift and later granted repeated extensions to transportation contracts beyond their original tenure.
Based on the findings of the PMLA investigation, the Hyderabad Zonal Office arrested Kesireddy Raja Shekhar Reddy and Dontireddy Vasudeva Reddy on June 11. Both were produced before the Special Court under the PMLA in Nampally, Hyderabad, on the same day.
The court remanded both accused to judicial custody until June 25, 2026. The ED said further investigation into the matter is ongoing.
