ED Questions Vijay Sai Reddy in Liquor Scam Probe

The Enforcement Directorate (ED) has intensified its probe into the ₹3,500-crore liquor scam that rocked Andhra Pradesh during the previous YSR Congress Party (YSRCP) government. In a key development, former MP V. Vijay Sai Reddy appeared before the ED’s regional office in Hyderabad on Thursday for questioning. He reached the office around 10.30 am and was interrogated at length under the provisions of the Prevention of Money Laundering Act (PMLA).

Focus on fund diversion

ED officials primarily focused on the controversial liquor policy implemented between 2019 and 2024. Investigators questioned V. Vijay Sai Reddy on alleged irregularities in tender allocations, profiteering under the guise of introducing new liquor brands, and diversion of funds through hawala channels. His statement was recorded as part of the case, which was registered based on a report submitted by the State Special Investigation Team (SIT) in September last year. The ED has preliminarily estimated that illegal transactions worth around ₹3,500 crore took place. Investigators are probing the sources of these funds and the alleged political beneficiaries.

During the questioning, V. Vijay Sai Reddy reportedly maintained that he had no direct role in either the formulation or implementation of the liquor policy. He stated that decisions related to tenders, selection of liquor brands, and price fixation were taken by government departments, the administrative machinery, and at the Cabinet level. He also denied any involvement in money laundering, hawala transactions, or links with shell companies, and asserted that no illicit funds were routed through him to former Chief Minister Y.S. Jagan Mohan Reddy . Reiterating that the case was politically motivated, he reportedly expressed willingness to cooperate with investigators by submitting all required documents and account details.

Resignation raises political questions

V. Vijay Sai Reddy’s appearance before the ED has triggered major political debate in the State. It may be recalled that on January 25, he unexpectedly resigned from the YSRCP and his Rajya Sabha membership. Political analysts believe he may have anticipated the intensity of the ED probe and decided to distance himself from the party. However, former Chief Minister Y.S. Jagan Mohan Reddy has described the entire episode as a “political conspiracy,” alleging that Central agencies are being misused to intimidate YSRCP leaders.

More arrests likely

Based on technical evidence and digital data collected so far, the ED is preparing to take further action in the case. Notices may be issued to representatives of liquor companies that secured tenders, as well as senior officials who played key roles during the previous government. With allegations that the money trail extended to the former Chief Minister’s Office, more significant developments are expected in the coming days. Meanwhile, YSRCP leader Mithun Reddy is scheduled to appear before the ED for questioning on Friday in connection with the case.