Kejriwal arrested: What is the Delhi excise policy case, and what is the Delhi CM accused of?

What is Kejriwal accused of?

The ED said in court that the Aam Aadmi Party (AAP) chief was the “kingpin and key conspirator of the Delhi excise scam”. Kejriwal, the ED said in its remand application, “was involved in the conspiracy…to favour certain persons and…in the demanding kickbacks from liquor businessmen in exchange of favours”.

He was also “involved in the use of proceeds of crime…in the Goa election campaign of the AAP of which he is the…ultimate decision maker”, the ED said.

Earlier, in a supplementary prosecution complaint, the ED had alleged that Kejriwal spoke to one of the main accused, Sameer Mahendru, over a video call and asked him to continue working with co-accused Vijay Nair, whom he referred to as “his boy”. Nair is a former communications in-charge of the AAP.

Additional Solicitor General S V Raju, who appeared for the ED, told the court on Friday that “AAP is a beneficiary which exists as a company. Every person responsible for the conduct of the company is responsible. Apart from being liable as an individual, the CM is also vicariously liable… Since Arvind Kejriwal is the national convener of AAP, he is responsible for its conduct. He controls the major activities of the party.”

What is the alleged connection of Kejriwal with the ‘South Group’?

According to the ED, Kejriwal was “directly involved in the formulation” of the excise policy, which was drafted “considering the favours to be granted to the South Group”.

The so-called South Group is a group of individuals from South India that the ED claims “secured uninhibited access, undue favours, attained stakes in established wholesale businesses and multiple retail zones (over and above what was allowed in the policy)”, and paid Rs 100 crore to AAP leaders in return.

One of the alleged members of the “South Group” is K Kavitha, leader of the Bharat Rashtra Samithi (BRS), and daughter of former Telangana Chief Minister K Chandrashekar Rao. Kavitha was arrested on March 15. It was after Kavitha’s arrest that the ED alleged, for the first time on March 18, that Kejriwal was a conspirator in the case.

“ED investigation revealed that Ms K Kavitha along with others conspired with the top leaders of AAP including Arvind Kejriwal and (former Deputy Chief Minister) Manish Sisodia for getting favours in the Delhi excise policy formulation and implementation. In exchange for these favours, she was involved in paying Rs 100 crore to the leaders of AAP,” the ED spokesperson alleged.

“By the acts of corruption and conspiracy in the formulation and implementation of Delhi Excise Policy 2021-22, a continuous stream of illegal funds in the form of kickback from the wholesalers was generated for AAP,” the ED said.

And what did Kejriwal argue in court?

Senior advocate Abhishek Manu Singhvi said Kejriwal had been arrested over facts that were “static and frozen for months”, and that the arrest was “based on three or four names”.

“There is a pattern,” Singhvi said. “Step 1: Many witnesses will give statements — Kejriwal won’t be mentioned. Step 2: arrest the witnesses and deny them bail. Last step: make a deal making them the approvers. The next day a statement will come which will be against Kejriwal. The next step is record the statement of the co accused. An approver is the most unworthy friend…his statements have zero credibility,” Singhvi said.

Singhvi argued that “more than 80%” of those connected with the case have not mentioned Kejriwal or any dealings with him. “The case has been stitched together by the words of some co-accused and the (Delhi) L-G and approvers. There is no evidence of any wrongdoing. No incriminating material has been found against me even after over one year has elapsed,” Singhvi said.

What is the Delhi excise policy case?

Two cases have been registered in relation to the excise policy — one by CBI, and the other, on alleged money laundering, by the ED.

The case arose out of a report submitted by Delhi Chief Secretary Naresh Kumar to Lieutenant Governor (LG) Vinai Kumar Saxena in July 2022, pointing to alleged procedural lapses in the formulation of the Delhi Excise Policy 2021-22. The policy came into force in November 2021, but was scrapped in July 2022.

The chief secretary’s report said “arbitrary and unilateral decisions” taken by Sisodia in his capacity as Excise Minister had resulted in “financial losses to the exchequer” estimated at more than Rs 580 crore.

It was alleged that “kickbacks…received by the AAP Delhi government and AAP leaders” from owners and operators of alcohol businesses for preferential treatment such as discounts and extensions in licence fee, waiver on penalties and relief due to disruptions caused by the Covid-19 pandemic, etc., were used to “influence” the Assembly elections in Punjab and Goa in early 2022.

This report was referred to the CBI, and led to Sisodia’s arrest on February 26, 2023.

The ED alleged that the scam was to give the wholesale liquor business to private entities and fix a 12% margin, for a 6% kickback. In its first prosecution complaint in November 2021, the ED said the policy was “formulated with deliberate loopholes” that “promoted cartel formations through the back door” to benefit AAP leaders.

Before his arrest, Kejriwal had been issued a total of nine summonses by the ED, which he had skipped.