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Azad orders AP CM to bury massive liquor scam

Rs 6,000 cr liquor scam allegedly involving at least eight ministers, 60 MLAs and eight MLCs of the ruling Congress in Andhra Pradesh was unearthed by the state Anti-Corruption Bureau (ACB) last month. But the Congress high command advised AP Chief Minister Kiran Kumar Reddy to bury the report as well as the probe, as action would have brought down the Kiran Reddy government.

All India Congress Committee general secretary Ghulam Nabi Azad, who looks after AP affairs, told Reddy not to pursue the probe he had ordered. Reddy obeyed. Azad conveyed this to the agitating ministers and MLAs during his visit to Hyderabad on 5-6 January.

According to ACB sources, the ministers whose names allegedly figure in the report are, P. Sabita Reddy (Home), Ponnala Lakshmaiah (IT and Endowments), Dharmana Prasada Rao (Roads and Buildings), T.G. Venkatesh (Medium Irrigation), Kanna Lakshminarayana (Housing), M. Maheedhar Reddy (Municipal Administration), Botsa Satyanarayana (Transport) and Kasu Venkata Krishna Reddy (Ports).

Botsa Satyanarayana, who is also Pradesh Congress Committee president, took the lead in complaining to the Congress high command in New Delhi, even demanding a CBI inquiry.

When contacted, Satyanarayana admitted that his family was involved in the liquor trade: "I admit that my family has 28% stakes in 24 liquor shops in my area. But that's not a crime. I have nothing to do with the irregularities of the liquor mafia. That's why I demand a CBI probe to clear my name."

A mafia type liquor syndicate has emerged in the state since 2004, the year the Congress government returned to power in AP. This syndicate regulates all affairs related to the liquor trade, from the allotment of retail shops, bars and restaurants to the fixing of the price of alcohol, which invariably exceeds the mandatory maximum retail price (MRP) by 30-40%. The syndicate also decides the entry and pricing of cheap liquor brands.

A chance raid conducted by the ACB on 11 November 2011 on a vehicle carrying excise officials unearthed Rs 6 lakh in cash. This was found to be "mamool" money (hafta or cut), which was being delivered to their higher ups in Hyderabad. When questioned, the officials revealed the details of the liquor syndicate's underground activities.

The ACB top brass brought this to the notice of the CM, who ordered Excise and Prohibition Commissioner Sameer Sharma to probe the liquor mafia. The ACB conducted state-wide raids to come to the conclusion that thousands of crores of rupees were being made by some ministers, MLAs, officers and even some local journalists who have links with the liquor syndicate.

AP has around 6,600 liquor retail shops and 1,540 bars and restaurants. In the last one year, the total volume of liquor trade has been Rs 19,000 cr, as per the MRP fixed by the Excise Department. But since traders freely flout the MRP, they made Rs 6,000 cr in just one year. If the total money made by this syndicate in the last six years is taken into account, as per the ACB reports, over Rs 30,000 cr has gone into the hands of this syndicate and the politicians, top officials and their associates involved.

"Every second Congress MLA is behind the liquor mafia. They have huge stakes in the liquor trade," a senior ACB officer told this newspaper.

"This is the money that is sustaining the politics of the ministers and MLAs. This money is coming from the toiling masses. A sort of parallel economy is being run by the liquor mafia well protected by the ruling party ministers, legislators and officials," said Dr Jayaprakash Narayan, MLA and national president of Lok Satta party.

ACB director general B. Bhoopati Babu told this newspaper on 17 December that the agency would disclose information on the liquor scam within a week. But now senior ACB officials are not willing to talk about the probe. "Everything is under investigation. We cannot say by when we will disclose the details," ACB additional director K. Srinivasa Reddy told this newspaper.

ACB sources say that efforts are underway to remove the names of the ministers, MLAs and officials from the scam, and pin the blame on some lower rung Excise and Prohibition officers for failing to check irregularities. The money paid to the ministers and MLAs is likely to be treated as donation from the liquor lobby.

Telugu Desam Party leader in the Legislative Council, Dadi Veerabhadra Rao said, "The Congress high command is afraid of a possible revolt by Botsa and his wife Jhansi Lakshmi, Lok Sabha member from Vizianagarm, apart from other ministers and MLAs who can pull down the Kiran Reddy government if the ACB goes ahead. That is why the high command has advised the CM to close the probe."

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