The Hyderabad Zonal Office of the ED arrested Karumuri Venkata Nageswara Rao, former Minister of Civil Supplies and former MLA, on August 23, 2026, under the PMLA, 2002, on charges of acting as a key mastermind in the APSBCL liquor transportation scam. He was produced before the Hon’ble Special Court (PMLA), Nampally, Hyderabad, on August 24, 2026, and the court remanded him to judicial custody for 15 days. Prior to this, the ED had arrested Kesireddy Raja Sekhar Reddy and Dontireddy Vasudeva Reddy on June 11, 2026, and Karumuri Sunil Kumar—son of Karumuri Venkata Nageswara Rao—on June 18, 2026. All three arrested accused are currently in judicial custody.
The Enforcement Directorate (ED), Hyderabad Zonal Office has arrested Karumuri Venkata Nageswara Rao, former Minister of Civil Supplies and former MLA, on 23.08.2026 under the provisions of the Prevention of Money Laundering Act (PMLA), 2002 for acting as the key architect in the APSBCL liquor transportation scam. He was produced before the Hon’ble Special Court (PMLA), Nampally, Hyderabad on 24.08.2026 and the Hon’ble Special Court has remanded him to 15 days judicial custody.
The ED initiated the investigation based on an FIR registered by the Andhra Pradesh CID under various sections of the Indian Penal Code (IPC), 1860, and the Indian Penal Code (BNS), 2023. The FIR was filed based on a complaint by the Additional Secretary (Vigilance), Government of Andhra Pradesh, alleging a loss of ₹195.33 crore to the state exchequer due to the APSBCL liquor transportation scam.
The ED investigation revealed that the terms of the liquor transportation tender of Andhra Pradesh State Beverages Corporation Limited (APSBCL) were deliberately altered and tailored to favor select entities, namely M/s Sigma Supply Chain Solutions Private Limited (SSCSPL) and later M/s Prasad Transports. These entities were merely acting as front entities, while the actual operational and financial control was vested in individuals associated with Kesireddy Raja Sekhar Reddy, Dottireddy Vasudeva Reddy and their associates.
The ED investigation further revealed that the liquor cartel had developed a mechanism to generate illegal profits through the transportation of liquor from depots to retail outlets in the state of Andhra Pradesh. Kesireddy Raja Shekhar Reddy, Tukekula Eswar Kiran Kumar Reddy, and Anjani Kumar, in active collusion with the then APSBCL Managing Director, Donthiraddy Vasudev Reddy, abused their influence to obtain liquor transportation tenders at rates significantly higher than the prevailing rates, thereby generating proceeds of crime. The investigation revealed that SSCSPL was used as a front entity to participate in the tender process and obtain contracts through a manipulated tender process. However, the actual execution and operational control of the transportation work was carried out by Tukekula Eswar Kiran Kumar Reddy, alias Kiran Kumar, and his associates, who were working under the direct supervision and control of Kesireddy Raja Shekhar Reddy, alias Raj.
The ED investigation revealed that Karumuri Venkata Nageswara Rao, along with his son Karumuri Sunil Kumar, took advantage of his political influence and close relations with members of the liquor transportation syndicate, particularly Kesireddy Raja Sekhar Reddy, Tukkula Eswara Kiran Kumar Reddy and Dottireddy Vasudeva Reddy, to exercise substantial control over the allocation of liquor transportation sub-contracts and derive significant illegal financial benefits therefrom.
The ED investigation further revealed that Karumuri Venkata Nageswara Rao and his son, Karumuri Sunil Kumar, arranged for M/s. Sri Sudarshana Constructions as a dummy sub-contractor for SSCSPL to transport liquor, while the actual transportation was carried out by other entities/individuals arranged by Karumuri Venkata Nageswara Rao and his son, Karumuri Sunil Kumar. It was revealed that M/s. Sri Sudarshana Constructions issued invoices of inflated value in the name of SSCSPL to facilitate the diversion of funds to its bank accounts. The funds thus received were transferred to the personal bank accounts of Karumuri Venkata Nageswara Rao and his family members. Additionally, a significant portion of the transportation proceeds was used by M/s. Sri Sudarshana Constructions and its associated individuals to pay for personal expenses incurred by Karumuri Venkata Nageswara Rao and his family members.
The ED investigation further established that the proceeds of crime thus acquired were used by Karumuri Venkata Nageswara Rao and Karumuri Sunil Kumar for acquisition of luxury properties including high-end motor vehicles and luxury watches, advance payments for purchase of immovable properties, political funding and meeting various personal and family expenses through direct banking transfers and cash transactions. Thus, the proceeds of crime were actually portrayed as business income.
Earlier, the ED had arrested Kesireddy Raja Sekhar Reddy and Dottireddy Vasudev Reddy on 11.06.2026 and Karumuri Sunil Kumar, son of Karumuri Venkata Nageswara Rao, on 18.06.2026 under the provisions of the PMLA, 2002. All three previously arrested accused are currently in judicial custody. Additionally, a provisional attachment order was issued on 06.08.2026 for attachment of properties valued at ₹37.79 crore, and a first prosecution complaint was filed on 07.08.2026 before the Hon’ble Special Court against the three previously arrested individuals and others.
Further investigation is underway in the matter.
Radhika Goyal is Author of Taxconcept Gurugram head office, for deeply reported tax, gst and income tax articles on issues that matter. He splits her time between New Delhi and Bengaluru, and has worked as a reporter, a podcaster and an editor for publications across India.