On Wednesday 04, October a senior Aam Aadmi Party (AAP) Rajya Sabha MP Sanjay Singh was arrested by the Enforcement Directorate (ED) in connection with a money laundering probe under the Delhi government’s Liquor Excise Policy 2021-22, which came into force in November 2021 but was scrapped in July 2022. This was the second high profile arrest after the arrest of Delhi’s Deputy Chief Minister Manish Sisodia on February 26 by CBI in broader investigation into alleged financial irregularities and corruption within the Delhi liquor industry.
The ED’s investigation has uncovered a complicated network of alleged conspiracy and financial misconduct involving Singh and other AAP leaders and businessmen. Dinesh Arora, a businessman who was closely associated to both Singh and Sisodia chose to become and Approver in the case and gave the crucial information that ultimately lead to Singh’s arrest.
Allegations made by ED against Sanjay Singh:
Meeting with Dinesh Arora – ED claimed that Dinesh Arora had met Sanjay Singh at Arora’s restaurant – Unplugged Courtyard, through whom he was introduced to Manish Sisodia.
Funding for AAP – Further ED also cited a call that is claimed to have happened between Arora and Singh wherein the latter said, “Delhi assembly elections were coming, and AAP was in need of funds, and he should seek funding from other restaurateurs for the same”.
Collection of Party Funds – On Singh’s request, Arora spoke to other “restaurant owners and arranged cheques amounting to Rs. 82 lakh (handed to Sisodia) for collection of party funds for upcoming assembly elections in Delhi,” the ED chargesheet stated.
Businessman Amit Arora – ED has also claimed that Amit Arora, another businessman had met Singh through Dinesh Arora in 2020. It is alleged that Amit Arora sought favourable changes in the excise policy to gain a better foothold in the Delhi liquor business as the brands marketed by Amit Arora’s company were quite high-end and were top-selling brands in other states, but they were not performing well in Delhi due to government-controlled retail shops.
Promised Policy Changes – “Sisodia had assured to make changes in then proposed 2020-21 excise policy to increase the brand registration criterion for IMFL brands at the behest of Amit Arora and Dinesh Arora,” claimed ED.
Stakes in Amit Arora’s Business – In return for the policy changes, ED adds, Vivek Tyagi, an associate and team member of Sanjay Singh, was given stakes in the business run by Amit Arora, Aralias Hospitality.
Allowing Singh’s aide equity in Amit Arora’s firm in exchange for changes in excise policy, according to the ED, was a “quid pro quo between Amit Arora, Dinesh Arora, and Sanjay Singh and Sisodia.”
Notably, the Delhi Excise policy change was never implemented, and the existing policy of 2019-20 was continued.
Revelation of Liquor Policy: How did it come into spotlight?
In July 2022. A report that was submitted by Delhi’s Chief Secretary Naresh Kumar to Lieutenant Governor Vinai Kumar Saxena pointed to alleged procedural errors in the formulation of the new Excise Policy 2021-22. This report suggested the unilateral decisions taken by Manish Sisodia, who also held the position of Excise Minister, lead to “financial losses to the exchequer” exceeding Rs. 580 crore. Furthermore, this report also alleged that “kickbacks… received by the AAP Delhi government and AAP leaders” from the owners and operators of alcohol business for advantageous treatment such as discounts and extension in lisence fee, waiver on penalties and relief due to disruptions caused by Covid – 19 pandemic, etc. were used to “influence” the Assembly elections held in Punjab and Goa in early 2022. The report’s findings and concerns prompted the participation of the Central Bureau of Investigation (CBI), which resulted in Manish Sisodia’s arrest.
The Delhi Excise Policy ‘Scam’: (Explanation)
The Delhi Excise Policy ‘Scam’, which is also known as the Delhi Liquor Excise ‘Scam’, centres around the financial misuse and corruption within the liquor industry in the national capital. This scandal revolves around the implementation of new Excise Policy 2021-22 under which the Delhi government issued retail liquor licences to almost 849 liquor vends across 32 excise zones.
AAP government provided certain relaxations to sellers including permission to offer discounts to consumers to boost sales and set their own prices irrespective of the MRP of the product. This policy marked the exit of the Delhi government’s involvement into the liquor businesses and therefore allegedly favoured specific businesses and lead to revenue losses for the government as there was no account maintained for the amount of liquor sold in the market.
According to BJP member Adesh Gupta there was a fall in the excise revenue despite double the sale of the liquor which was a major proof of the corruption in the implementation of the policy. He claimed that under the previous tax regime (2019-20), the Delhi government the Delhi government generated 5,068 crore in excise revenue on 132 lakh litres of liquor sold each month. However, once the new excise policy was implemented, liquor sales allegedly increased to 245 lakh litres per month, while income fell to barely 4,465 crore. “The Delhi government suffered a loss of more than Rs. 3,000 crores due to the change in the policy, while the money received from the liquor mafia was spent in the Punjab elections,” Gupta alleged, adding that chief minister Arvind Kejriwal and his deputy Manish Sisodia gained a major share of money.
This issue focuses around the allegations of unfair financial favours being extended to certain businesses in exchange for kickbacks. These funds were presumably utilized as party funds. This conspiracy of politicians, bureaucrats and businessmen allegedly aimed to manipulate the liquor market and generate illegal profits that were later shared amongst themselves.
Several arrests have been made from the ED’s probe into the Delhi Excise Scam, including former Delhi’s Deputy Chief Minister Manish Sisodia, AAP’s communication in-charge Vijay Nair, and numerous businesses linked with the liquor business.
These high – profile case has stirred political controversy with AAP and I.N.D.I.A., an opposition alliance and the central government accusing the latter of employing law enforcement authorities for political vendettas and conspiring against them.
“We are seeing how false cases are being slapped in an attempt to subdue and threaten opposition leaders, opposition parties,” Arvind Kejriwal, leader of AAP said.
“AAP MP Sh. @SanjayAzadSln ji’s arrest by the ED takes the BJP’s vendetta politics to another level. We stand in complete solidarity with him and reject the use of law enforcement agencies to settle political scores,” Congress general secretary KC Venugopal wrote on X (formerly Twitter).
This complicated and dynamic investigation is still ongoing, with the possibility of new developments and arrests. The situation is still being closely watched by multiple stakeholders, and the final decision will define the trajectory of justice in this case.
Written By: Madhu Shah (Trainee Reporter)