Excise policy in Delhi: ED arrests Sarath Reddy of Aurobindo Pharma in money laundering case

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.