Reports suggest that businessman Arun Ramachandra Pillai has taken the step of becoming an approver in the high-profile Delhi liquor scam case, currently under investigation by both the Central Bureau of Investigation (CBI) and the Enforcement Directorate (ED).

An approver is an individual initially accused of a crime but subsequently admits guilt and consents to provide testimony on behalf of the prosecution. Pillai had been arrested by the ED on March 7, with the arrest made under the provisions of the Prevention of Money Laundering Act (PMLA).

This development follows the decision of YSRCP MP Magunta Sreenivasulu Reddy, whose name was also linked to the case, to become an approver on September 8. Prior to him, his son Magunta Raghava Reddy had already chosen to be an approver.

Pillai now joins a group of five individuals from South India who have opted to become approvers in this high-profile case, following in the footsteps of Sreenivasulu Reddy, his son Raghava, Hyderabad-based industrialist P Sharath Chandra Reddy, and Butchibabu Gorantla, the Chartered Accountant of BRS MLC K Kavitha, who has been summoned by ED on Wednesday.  

Additionally, businessman Dinesh Arora has also chosen to be an approver, bringing the total number of individuals cooperating in the case to six.

The motivations behind Pillai's decision to become an approver remain unclear, particularly given his status as a key figure in the case. His name had been mentioned in the FIR issued by the CBI when the scam was initially uncovered in New Delhi.

Raids revealed vital info

In 2022, the CBI initiated search operations at Pillai's residence located in Sushee Realty's Eden Gardens in Kokapet, Hyderabad. This action came a few weeks following the CBI's raids on residences of individuals allegedly involved in the liquor policy scandal in New Delhi.

In response to an FIR filed by the CBI, the ED swiftly launched coordinated searches at multiple locations spanning New Delhi, Hyderabad, Bengaluru, and Lucknow, all linked to the case.

The ED's operations were based on the same FIR as the CBI's, with separate teams from the ED conducting simultaneous raids at the residences of at least half a dozen individuals, including Pillai, who were named in the FIR.

In total, the FIR listed the names of 16 individuals, including the then-deputy chief minister of Delhi, Manish Sisodia, in a document filed on August 17, 2022.

Following the FIR registration, the CBI executed searches at the residences of Sisodia, Pillai, and other individuals, leading to the seizure of critical documents. Earlier, BRS MLC Kavitha and others had been questioned multiple times by the ED at its New Delhi office, with Kavitha voluntarily providing her mobile phones for examination.

Both investigative agencies have alleged that Pillai, a liquor manufacturer from South India, acted as the public face of the so-called "South Group" and played a pivotal role in the case.

South Group

In its inaugural prosecution complaint presented to the court, the ED has alleged that Vijay Nair, the head of communication for the Aam Aadmi Party (AAP), received kickbacks totaling ₹100 crore on behalf of AAP leaders from what has been referred to as the "South Group," a term used in statements provided by various individuals during the investigation.

The CBI identified prominent figures within the South Group, including Sreenuvasula Reddy, his son Raghava, and Kavitha.

Arun Ramachandra Pillai, a businessman, was apprehended by the ED on suspicions that he was one of the three primary representatives associated with BRS MLC K Kavitha.

In addition to Pillai, two other representatives linked to Kavitha were reported to be Abhishek Boinpally, the proprietor of a beauty salon chain, and Chartered Accountant Gorantla Butchibabu.

Kickbacks – money paid to somebody illegally in return for work or help

The investigative agency also revealed that, as part of their agreement, the South Group made advance payments to AAP leaders through Vijay Nair in the form of kickbacks. In return for these kickbacks, the South Group gained unrestricted access, received undue privileges, and acquired shares in established wholesale enterprises and multiple retail zones, surpassing the limits stipulated by the policy, as outlined in the CBI's charge sheet.

To recoup the kickbacks, the South Group's partners were granted a 65 percent ownership stake in Indo-Spirits, in collaboration with Sameer Mahendru, the company's proprietor. Nair orchestrated this partnership arrangement with the assurance of granting Indo-Spirits the wholesale business of Pernod Richard.

According to the investigative agency, the South Group manipulated Indo-Spirits' shares through deceptive practices, concealment, and the use of proxies.