The irregularities committed in Delhi excise policy 2022 has resulted in a loss of ₹2,631 crore to the public exchequer, the Enforcement Directorate said in its application filed before a court on Thursday seeking remand of Aurobindo Pharma’s whole time director P Sharath Chandra Reddy.

Delhi deputy chief minister Manish Sisodia is among the prime accused in the Delhi excise case which the Central Bureau of Investigation probed first on a report by Delhi LG Vinai Saxena that alleged a cartel of liquor company and retailers had benefited due to a nexus with the AAP government servants. In the 13-page long remand application, the ED charged that “during the course of investigation, various persons involved in the Delhi excise scam have revealed that bribe of ₹100 crore had been given in advance for undue benefits to select business group by the Delhi government”.

“Reddy and others-led South group cartel gave kickbacks to the tune of ₹100 crore through Vijay Nair and through the web of multiple retail zones and Indo Spirits as the wholesaler was recovering the payments made in advance,” alleged the ED in the application before the court.

Computing the losses, the agency stated that retail L7 zones for liquor licences were auctioned in two phases and total base licence fee was fixed at ₹7,025 crore for 2021-22 and the bids amount was ₹8,911 crore for one year. Other than that, since the licence period was from November 17, 2021 to August 31, 2022, the pro rata licence fee that should have come to excise department of Delhi is ₹7,029 crore. “However, only ₹5,037 crore could be collected by the excise department as licence fee,” the ED said in its remand application.

According to the break up of the revenue loss of ₹2,631 crore calculated by excise department itself and shared to ED, ₹1,036.4 crore was owing to inability to collect licence fee due to surrendering of licence by L7 licence holders during the period from November 17, 2021 to August 31, 2022.

Similarly, ₹719 crore was the loss due to failure of collection of the licence fee for non-opening of L7 vends in the non-conforming wards due to the High Court order of December 9, 2021. The ED suspects that the Delhi government increased the profit margin of L1 wholesalers in the new excise policy from 5 per cent to 12 per cent which, too, led to the slippage in revenue collection to the tune of ₹339 crore. Likewise, ED alleged there were loses because of other mallafide decisions such as refund of security deposit to licencees (₹119 crore).

The ED has charged that Reddy has emerged as one the “king pins and major beneficiary of the scam since he was effectively controlling five retail zones through his group company Trident Chemphar Pvt Ltd and provxy entities namely, Organomixx Ecosystems and Sri Avantika Contractors in violation of excise policy which barred any person to control more than 2 retail zones”.

The ED had dug out papers to allege that formulation of excise policy was also tainted, including the fact that Group of Ministers led by Manish Sisodia did not accept a recommendation of an expert committee that the wholesale operation should be handed over to a single government entity to avoid cartelisation.

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