The Enforcement Directorate (ED) has arrested Bharat Rashtra Samithi (BRS) MLC K Kavitha in Hyderabad after a day-long questioning followed by a raid at her Hyderabad residence. K Kavitha was arrested in connection with the Delhi excise policy-linked money laundering case. K Kavitha was brought to the office of the Directorate of Enforcement (ED) in the national capital on Saturday. The action comes almost two months after the ED issued a summons to the 45-year-old BRS MLC. K Kavitha was questioned thrice in this case last year and the central agency recorded her statement under the Prevention of Money Laundering Act (PMLA).


Link Between Kavitha And Delhi Scam


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The CBI had earlier questioned Kavitha in connection with the money laundering case. The ED case was filed after taking cognisance of the CBI's FIR. According to ED, Hyderabad-based businessman Arun Ramchandra Pillai, who was arrested last year in the case, is one of the key persons in the entire scam. The scam involves payments of huge kickbacks and the formation of the biggest cartel by the South Group. (With ANI inputs)


According to reports, South Group comprises Telangana MLC Kavitha, Sarath Reddy (promoter of Aurobindo Group), Magunta Srinivasulu Reddy (MP, Ongole), his son Raghav Magunta, and others. The South Group was being represented by Pillai, Abhishek Boinpalli and Butchi Babu, the ED said. It is alleged that the South Group gave Rs 100 crore to Aam Aadmi Party (AAP) and Pillai worked as a representative of K Kavithaa and played a crucial role in this deal. ED has already questioned Pillai several times. 


What ED Said About K Kavitha


On K Kavitha's arrest, the ED investigation officer said, "I believe that Smt. Kalvakuntla Kavitha w/o Mr. D R Anil Kumar, residing at H. No. 8-2316/S/H, Road No 14, Banjara Hills, Hyderabad, Telengana-500034 has been guilty of an offence punishable under the provision of Prevention of Money Laundering Act, 2002 (15 of 2003)....Now, therefore, in exercise of the power conferred upon me under sub-section (1) of section 19 of the Prevention of Money Laundering Act, 2002 (915 of 2003), I hereby arrest the said Smt. Kalvakuntla Kavitha at 05.20 pm on 15.03.2024 and she has been informed of grounds for arrest. A copy of the grounds of arrest (containing 14 pages) have been served upon her," the officer added.


Pillai is learnt to be 32.5 per cent partner in Indo Spirits, which had got an L1 licence. Indo Spirits is a partnership firm of Arun (32.5 per cent), Prem Rahul (32.5 per cent) and Indospirit Distribution Limited (35 per cent), wherein Arun and Prem Rahul represented "the benami investments of Kavitha and Magunta Srinivasulu Reddy and his son Raghava Magunta.


Allegations Of Undue Favour


The ED and the CBI had alleged that irregularities were committed while modifying the Excise Policy, undue favours were extended to licence holders, the licence fee was waived or reduced and the L-1 licence was extended without the competent authority's approval. The beneficiaries diverted "illegal" gains to the accused officials and made false entries in their books of account to evade detection, the probe agencies said. As per the allegations, the Excise Department had decided to refund the Earnest Money Deposit of about Rs 30 crore to a successful tenderer against the set rules. Even though there was no enabling provision, a waiver on tendered licence fees was allowed from December 28, 2021, to January 27, 2022, due to COVID-19, the probe agency said and there was the alleged loss of Rs 144.36 crore to the exchequer.