Former Andhra Minister Karumuri Nageswara Rao Arrested in Liquor Scam

New Delhi, India Aug 24, 2026 ALN: Former Andhra Minister Arrested

The Enforcement Directorate (ED) arrested former Andhra Pradesh minister from the YSR Congress Party, Karumuri Nageswara Rao, in connection with the alleged liquor transport scam on August 23. This arrest marks a significant development in an ongoing investigation into alleged irregularities in liquor transport contracts that occurred under the previous YSRCP government. The case is particularly concerning as it is believed to have caused a staggering loss of Rs 195 crore to the state exchequer, raising serious questions about governance and accountability in the management of state resources.

Details of the Allegations

The alleged liquor scam revolves around the misuse of the state’s liquor policy, which reportedly facilitated the replacement of popular liquor brands with lesser-known alternatives. This substitution was allegedly executed in exchange for bribes amounting to a total of Rs 3,200 crore. Such a massive figure indicates a deeply entrenched system of corruption that not only affected the state's revenue but also potentially undermined public trust in government institutions.

ED officials took Nageswara Rao into custody from his residence in Kondapur, Hyderabad, for questioning. His arrest followed the Supreme Court's denial of anticipatory bail in July, which underscored the seriousness of the charges against him and the potential for evidence tampering or flight risk if he were to remain free.

Previous Arrests Linked to the Case

The ED's investigation was initiated based on an FIR registered by the Crime Investigation Department (CID) of Andhra Pradesh. This case has seen multiple arrests, including that of Nageswara Rao’s son, Karumuri Sunil Kumar, in June. Sunil was apprehended in connection with the transport scam case, alongside Raj Kessireddy, who is alleged to be the main conspirator in this financial crime. Raj served as the former IT advisor to then Chief Minister YS Jagan Mohan Reddy and is believed to be at the center of the manipulation of liquor transportation tenders that were floated by the government-owned Andhra Pradesh State Beverages Corporation Limited (APSBCL).

Manipulation of Contracts

At the time of Sunil’s arrest, the public prosecutor informed the court that Nageswara Rao, during his tenure as the minister for Civil Supplies in the previous YSRCP government, had managed to secure lucrative liquor transport sub-contracts for his business associates. The ED has alleged that Sunil and his associates derived unlawful gains from these contracts, highlighting a significant conflict of interest and misuse of power. Investigations revealed that the government was paying around Rs 35 per km for liquor transport, while the prevailing market rate stood at only Rs 13 per km, suggesting that taxpayers were being significantly overcharged.

The ED and CID further alleged that the conditions of the liquor transport tender issued by APSBCL were deliberately modified and tailored to favor selected entities that acted merely as fronts. In reality, the operational and financial control of these contracts remained with individuals closely associated with Raj and his network. This manipulation not only resulted in financial losses for the state but also raised ethical concerns about the integrity of the procurement process.

According to the CID, there was a detailed plan orchestrated by Raj and his associates to receive bribes worth Rs 50 to 60 crore per month. This systematic approach ensured that orders were consistently placed with specific liquor companies, from which pre-fixed bribes were received. Such practices not only violate legal norms but also erode public trust in the government’s ability to manage state resources effectively and transparently.

Implications of the Arrest

The arrest of Karumuri Nageswara Rao and the ongoing investigation into the liquor scam have broader implications for the political landscape in Andhra Pradesh. This case highlights the persistent issues of corruption within political circles, particularly in the management of state resources. The involvement of high-profile political figures raises questions about accountability and the need for comprehensive reforms in governance.

This situation may also have repercussions for the YSR Congress Party (YSRCP) as it seeks to maintain its credibility and public support. The party's leadership will likely face scrutiny regarding how they address corruption within their ranks and whether they can implement measures to prevent such incidents in the future.

Furthermore, the case underscores the importance of robust oversight mechanisms in public procurement processes. As the ED and CID continue their investigations, there may be calls for stricter regulations and transparency in government contracts to safeguard against similar abuses of power. The outcome of this case could set a precedent for how future corruption cases are handled in the state and may influence public sentiment regarding political accountability.

In summary, the arrest of Karumuri Nageswara Rao is a significant event in the ongoing fight against corruption in Andhra Pradesh. It serves as a reminder of the need for vigilance and integrity in public office, as well as the importance of holding individuals accountable for their actions in the management of public resources.