The Enforcement Directorate (ED) has arrested two company officials in connection with alleged irregularities in the now-abolished excise duty policy in Delhi, people with direct knowledge of the matter said on Thursday. Fr. Sarath Chandra Reddy of the Hyderabad-based Aurobindo Pharma Group and Binoy Babu of the Pernod Ricard wine and spirits company have been arrested under the Anti-Money Laundering Act. A local court on Thursday remanded both defendants for seven days.
Reddy is accused of being instrumental in alleged supplier cartel formation and playing a key role in forwarding alleged bribes. Insiders said Babu was also involved in the alleged cartel process.
According to available information, Reddy was previously questioned twice by the federal agency. In a statement, Aurobindo Pharma Ltd, a drugmaker, said it had learned the arrest of Reddy, a full-time director of the company’s Promoter Group, was in no way linked to the company’s operations or its subsidiaries. The statement came after the company’s shares began falling during the trading day. They closed 11.7% lower at Rs 478.10 on the BSE on Thursday. So far, the ED has arrested three people. The first person arrested in the case was Sameer Mahendru of the Indospirit group. He was arrested in September. Deputy Prime Minister of Delhi Manish Sisodia is one of the main defendants in the case. Sisodia has repeatedly denied any wrongdoing. The agency earlier this month raided the premises of Devendra Sharma, a personal assistant to Sisodia. It had also questioned Sharma. Meanwhile, the Central Bureau of Investigation recently asked a court in Delhi for permission to refer a co-defendant in the case to a witness.