In a political bombshell ahead of the Monsoon Session of Parliament, a 305-page chargesheet filed by a Special Investigation Team (SIT) of the Andhra Pradesh Police in the Rs 3,500 crore liquor policy scam has named former Chief Minister YS Jagan Mohan Reddy as a recipient of massive monthly kickbacks during his regime but stopped short of naming him as an accused.The chargesheet, yet to be taken cognisance of by the court, alleges that between 2019 and 2024, an average of Rs 50 to 60 crore was collected each month from distilleries and routed through a network of aides and shell companies, with the ultimate beneficiary being Jagan Mohan Reddy.Advertisement“The collected amounts were eventually handed over to Kesireddy Rajasekhar Reddy (A-1). Rajasekhar Reddy would then pass the money to Vijay Sai Reddy (A-5), Mithun Reddy (A-4), Balaji (A-33) who would transfer it to former Chief Minister Y S Jagan Mohan Reddy. On an average, Rs 50-60 crore was collected every month (during the 2019-24 YSRCP regime),” the chargesheet states, citing corroborative witness testimony.This revelation comes on the heels of the SIT arresting Rajampet MP and YSRCP Lok Sabha floor leader P V Midhun Reddy on Saturday. He is accused of playing a key role in the alleged scam, which, according to the SIT, was orchestrated to fund the party’s 2024 Assembly election campaign using laundered funds.Describing Midhun Reddy as a “core conspirator from inception to execution,” the SIT alleges he helped design the excise policy and coordinated kickbacks from distilleries. “The transaction trail indicated the use of front or shell companies for laundering kickbacks,” says the arrest notice.AdvertisementThe chargesheet paints a sweeping picture of a systematically rigged liquor policy, allegedly drafted with the intent of extorting distilleries and funneling bribes to the tune of Rs 3,200 crore into the ruling party’s coffers. Investigators say the YSRCP regime manipulated excise approvals, favoured local liquor brands in exchange for bribes, and replaced automated order systems with manual processes to exercise tighter control and evade transparency.“The accused planned the change in excise policy and also its modalities, to ensure that they would receive large kickbacks,” it says. Distillers were reportedly coerced into paying up to 20 per cent of the base price under threat of being excluded from supply orders – a tactic the SIT equates to extortion.The majority portion of the kickbacks was received in gold, cash or bullion, the chargesheet says.At the centre of the alleged scam is Kasireddy Rajasekhar Reddy, a former IT advisor to Jagan and labelled by the SIT as the “mastermind” of the operation. He is accused of planting loyalists in the Andhra Pradesh State Beverages Corporation Limited (APSBCL), setting up shell distilleries, laundering money through over 30 firms, and channelling funds for electioneering and asset purchases abroad, including luxury properties in Dubai and Africa.The Enforcement Directorate has also opened a parallel probe under the Prevention of Money Laundering Act (PMLA), with an ECIR registered in May. Investigators say the corruption racket was triggered by a 2019 meeting at Hotel Park Hyatt, Hyderabad, where distillery owners were summoned by YSRCP leaders and allegedly warned to comply with the kickback scheme or lose business.Following Midhun Reddy’s arrest, the YSRCP cried foul, alleging “political vendetta” by Chief Minister N Chandrababu Naidu’s government. “This is nothing but a misuse of power to target opposition leaders,” several party leaders said in a joint statement.A party insider claimed Midhun’s rising clout, especially after the exit of Vijayasai Reddy, made him a threat.“After Vijayasai Reddy’s exit, Midhun was the go-to man for young workers. He was also the party’s face in Delhi. His father has been one of the TDP’s biggest critics. By arresting him, the TDP wants to send a message that even Jagan’s closest aides would not be spared,” a party insider said.TDP leaders, however, maintain that the arrest is backed by concrete evidence. “The money acquired through illegal means was used to fund YSRCP’s 2024 campaign,” said a senior TDP functionary.most readWhat is the alleged scam?The Rs 3,500 crore scam revolves around a liquor policy introduced by the YSRCP government in 2019, which was initially positioned as a step towards phased prohibition. Instead, investigators allege the policy was manipulated to benefit certain distilleries and shell brands in exchange for hefty monthly kickbacks. Popular liquor brands were pushed out, and lesser-known ones were favoured under a manually controlled supply system that replaced the earlier automated Order for Supply (OFS) process.Distilleries were allegedly coerced into paying 12 to 20 percent of their base price as bribes in exchange for continued business. A 2019 meeting held at Hyderabad’s Park Hyatt, attended by liquor manufacturers and YSRCP leaders, was cited in the chargesheet as the starting point of this extortion racket. Those who refused to comply were allegedly threatened with denial of OFS orders, effectively cutting off their supply chains.The SIT claims that the collected money, averaging Rs 65 to 70 crore monthly, was routed through over 30 shell companies, with portions laundered into gold, land, and overseas assets.