The Supreme Court on Friday upheld the arrest of K. Rajasekhar Reddy, the prime accused in the ₹3,200-crore Andhra Pradesh liquor scam, dismissing his petition that termed the arrest as "illegal."

Reddy, an IT advisor to former Andhra Pradesh Chief Minister YS Jagan Mohan Reddy, was taken into custody last month by a Special Investigation Team (SIT) constituted by the state government.

A division bench led by Justice JB Pardiwala found “no merit” in Reddy’s plea challenging his arrest, though the court clarified that he remains free to seek regular bail through appropriate legal channels.

According to the remand report submitted to a local court on April 22, the SIT has alleged that Reddy played a central role in a conspiracy to manipulate the state's liquor procurement system between 2019 and 2024. The investigation suggests that under his direction, several popular national liquor brands were deliberately sidelined in favour of newly introduced "blue-eyed" brands. These new brands allegedly benefitted from significantly larger order volumes, often exceeding regulatory limits.

The report further claims that kickbacks were collected per case—₹150 for low-cost brands, ₹200 for mid-range, and up to ₹600 for premium brands. These funds were allegedly routed through Reddy and distributed among leaders of the Yuvajana Sramika Rythu Congress Party (YSRCP).

The SIT has described the case as involving criminal conspiracy, cheating, criminal breach of trust, corruption, and money laundering. The irregularities reportedly led to wrongful gains for a select group of individuals and distilleries, while causing substantial losses to the Andhra Pradesh State Beverages Corporation and the state exchequer, amounting to over ₹3,200 crore.