Excise policy case: ED arrests BRS leader Kavitha in Hyderabad; brings her to Delhi

K Kavitha. Pic/PTI

The Enforcement Directorate on Friday arrested BRS leader K Kavitha after an hours-long raid at her premises in Hyderabad and brought her to Delhi for questioning in a money laundering case linked to the now-scrapped Delhi excise policy, agency sources said. The BRS leader entered the agency's headquarters in central Delhi around midnight and would be lodged there for the night, sources said.

Kavitha, 46, a Telangana Legislative Council member, was arrested by the central probe agency at 5:20 pm from her residence at Banjara Hills in Hyderabad, according to the arrest memo. Her husband D R Anil Kumar was informed about her arrest and her preliminary statement was recorded under the Prevention of Money Laundering Act (PMLA) during the search that began at 1:45 pm, ED officials said. She is the third high-profile arrest in the case after AAP leaders Manish Sisodia and Sanjay Singh. Her arrest came a day before the scheduled announcement of the Lok Sabha election schedule. Kavitha, the daughter of former Telangana chief minister K Chandrashekar Rao, was brought to Delhi in a commercial flight that landed at the IGI Airport late evening.

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She is expected to be produced before a designated PMLA court on Saturday where the agency will seek her remand for custodial interrogation. Kavitha's legal team said the arrest was illegal as her petition against the ED summons had been listed by the Supreme Court for hearing on March 19. ED officials recorded in their 'panchnama' that about 20 persons entered Kavitha's house and created a "ruckus" which led to a delay in their proceedings. Five mobile phones were seized by the ED during the search action, officials said. The ED questioned Kavitha thrice last year in this case and again summoned her this year but she did not depose citing a Supreme Court direction that allowed her protection from any coercive action.

Talking to reporters in Hyderabad, BRS leader and former Telangana minister Vemula Prashanth Reddy alleged that the move was "pre-planned" and said they would protest against it. BRS working president K T Rama Rao, former minister Harish Rao and a large number of party workers gathered at Kavitha's residence and raised slogans.

Meanwhile, a video was shared by the BRS showing Kavitha's brother and party working president K T Rama Rao arguing with the ED officials, saying the agency has violated an undertaking given to the Supreme Court. "You are in serious trouble," he was heard telling the officials in the video, which went viral. In the video he also alleged that the family members were not allowed to enter the house even after the searches were concluded. "Search is over and an arrest warrant is produced and now she (ED official) says you cannot come in. Family cannot come in and she also says they have no transit warrant and cannot produce before a magistrate, but she wants to make a case, he said.

Rama Rao attacked the BJP-led Centre and alleged "abuse of power and institutional misuse to settle political scores is something that has become increasingly common" with the BJP government in the last 10 years. In a post on the social media platform X, he said, "ED needs to answer the Supreme Court on the inordinate rush to arrest when the matter is very much sub-judice and up for review in a couple of days, on the 19th March. What's even more appalling is the ED undermining its own undertaking given to the Hon'ble Supreme Court. Justice shall prevail and we will continue to fight legally."

Reacting to her arrest, senior BJP leader and Union Minister for Tourism G Kishan Reddy told reporters that ED raids are part of its inquiry into the case. "She was also avoiding questioning by the ED by showing some reasons. If she's not guilty and not involved in the liquor case, Kavitha needs to appear before the ED or CBI to prove her innocence," Reddy said.

The Enforcement Directorate had claimed Kavitha was linked to a "South Group" lobby of liquor traders who were trying to play a larger role under the now-scrapped Delhi excise policy for 2021-22. It alleged that one of the accused in the case, Vijay Nair, received kickbacks to the tune of at least Rs 100 crore on behalf of AAP leaders from the "South Group", allegedly controlled by Sarath Reddy, Kavitha and Magunta Srinivasulu Reddy.

In the last round of questioning by the ED, officials said, Kavitha was confronted with Hyderabad-based businessman Arun Ramchandran Pillai, who was arrested in the case earlier and allegedly shared close ties with her. Kavitha has then asserted that she had done nothing wrong and alleged that the Centre was "using" the ED as the BJP could not gain a "backdoor entry" into Telangana.

The "South Group", according to the ED, comprises Sarath Reddy (promoter of Aurobindo Pharma), Magunta Srinivasulu Reddy (YSR Congress MP from Ongole Lok Sabha seat in Andhra Pradesh), his son Raghav Magunta, Kavitha and others. The ED also alleged in Pillai's remand papers that he "represented the benami investments" of Kavitha in the case. Kavitha was earlier questioned by the Central Bureau of Investigation (CBI) in connection with the case at her residence in Hyderabad. The ED also recorded the statement of Butchibabu, an accountant allegedly linked to Kavitha.

According to the ED, the accountant said that "there was political understanding between K Kavitha and (Delhi) chief minister (Arvind Kejriwal) and (then Delhi) deputy chief minister (Manish Sisodia). In that process, K Kavitha also met Vijay Nair on March 19-20, 2021". Nair was arrested in the case by both the ED and the CBI. The agency alleged the Delhi government's excise policy for 2021-22 to grant licences to liquor traders allowed cartelisation and favoured certain dealers who had allegedly paid bribes for it, a charge strongly refuted by the AAP. The policy was subsequently scrapped and the Delhi lieutenant governor recommended a CBI probe, following which the ED registered a case under the Prevention of Money Laundering Act (PMLA).

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