ED Alleges Karnataka Excise Officials Operated Liquor Businesses Through Family Members While Holding Office; ₹13.3 Crore Assets Seized
Bengaluru, July 1: In a major development that could have far-reaching political and administrative implications, the Enforcement Directorate (ED) has alleged that most of the Excise Department officials under investigation had obtained liquor licences in the names of their family members or entities under their control and were allegedly operating liquor businesses while serving in the department.
The allegation forms part of the ED’s investigation under the Prevention of Money Laundering Act (PMLA), 2002, following coordinated searches conducted on June 24, 2026, at 14 locations across Bengaluru, Mysuru and Belagavi.
The searches were carried out in connection with allegations of an organised corruption network within the Karnataka Excise Department and the alleged generation and laundering of illicit wealth by public servants.
According to the Enforcement Directorate, the investigation originated from an FIR registered by the Karnataka Lokayukta Police against senior Excise Department officials and employees accused of accepting illegal gratification for processing, issuing, renewing and transferring excise licences.
The ED stated that its investigation, supported by documents, complaints and other evidence collected during the probe, indicated that the accused officials allegedly laundered proceeds of crime through investments in movable and immovable assets, benami transactions and business ventures operated through family members and associates.
Alleged Organised Bribery Network
According to the ED, investigators have uncovered an alleged organised network comprising Excise Department officials, their associates and private individuals for systematic collection of illegal bribes.
The agency alleged that liquor shop owners were required to make fixed monthly illegal payments to regional Excise officials. Apart from these alleged monthly collections, bribes were also allegedly collected for licence renewals, licence transfers and issuance of fresh licences.
The ED further alleged that the illegally collected money was pooled at a central level and distributed among concerned persons through intermediaries. During the searches, investigators reportedly recovered an informal cash book allegedly recording receipts and distribution of illegal funds.
Liquor Licences Allegedly Held Through Family Members
The most significant allegation in the ED’s press release concerns the manner in which liquor businesses were allegedly operated.
According to the agency, the investigation has revealed that most of the Excise Department officials had obtained liquor licences in the names of their family members or firms and entities under their control.
The ED has alleged that these liquor establishments were being operated illegally through such family members or controlled entities, despite the officials themselves serving in the Excise Department.
The agency further alleged that income generated from these liquor businesses was projected as legitimate business income, thereby enabling the alleged proceeds of crime to be integrated into the formal economy.
If established during the course of investigation and judicial proceedings, the allegation could point to a serious conflict of interest, with officials allegedly connected to the regulation of liquor trade simultaneously benefiting from businesses operating in the same sector through proxy ownership.
Searches and Seizures
The Enforcement Directorate said searches resulted in the seizure of:
- Cash worth approximately ₹5.5 crore
- Gold jewellery valued at around ₹7.8 crore
- Foreign currency worth approximately ₹3.3 lakh
The agency stated that the total value of proceeds of crime seized in the case so far stands at approximately ₹13.3 crore.
Searches also led to the recovery of digital devices, property documents, cash books allegedly relating to bribe distribution and other incriminating material, which are being examined as part of the ongoing investigation.
The searches covered premises linked to Excise Department officials Jagdish Nayak, K.M. Thammanna and Y.D. Manjunath, along with their family members, business associates and other connected persons.
The Enforcement Directorate said further investigation is continuing.
Legal Disclaimer: The allegations mentioned above are based on the official Enforcement Directorate press release and form part of an ongoing investigation. The allegations have not been adjudicated by any court of law, and all individuals concerned are presumed innocent unless proven guilty through due legal process.
About the Author
