Liquor empire, decades of clout loaded Jharkhand MP’s treasure troves
For decades, the factory had melted into the semi-urban background, its humdrum daily operations causing barely a flutter in Bolangir, a district headquarters, but with all the inertia of a small town, with its low, colourful buildings, interspersed with fields of green.
In Sudapada, right next to the hum of movement from the bustling Bolangir railway station,is the compound of Baldeo Sahu and sons, among the oldest country-made liquor factories in Odisha. The walls, 20-feet-high are painted white, bit have become dull and weathered over time. There are two iron gates, each 10-feet-tall, which only open for workers who traipse in and out, or the vans which carry country liquor processed from the Mahua flower.
That was till December 6, when there was a storm of activity.
Early that Wednesday morning, over a hundred income tax officials, accompanied by dozens of gun toting Central Industrial Security Force personnel arrived at the gates. Over the next three days, the officials, Odisha and India were left stunned with what was inside. Steel almirah after steel almirah, cupboard after cupboard, hiding place after hiding place was stuffed with wads of cash, in denominations that ranged from ₹100 to ₹500 .
In Bolangir alone, the taxmen found currency notes to the tune of ₹285 crore, but the search quickly expanded to Titlagarh, Sundargarh, and Sambalpur, where they found another ₹50 crore on the premises of liquor traders with close links to the company. In Jharkhand, where searches are still on, they have found over 24 crore. There was more than just cash, there was jewellery and gold coins.
As television channels beamed visuals of the heaps of currency notes, the images have become the fulcrum of a political storm, part of a larger 2024 Lok Sabha elections focused campaign that revolves around corruption. Prime Minister Narendra Modi took to the social media site X, comparing the events of the last week to a popular web series. “In India, who needs ‘Money Heist’ fiction, when you have the Congress Party, whose heists are legendary for 70 years and counting!” he wrote.
The Congress has attempted to distance themselves from the controversy, saying that the party has nothing to do with the stacks of notes, and that the person at the centre of it all must explain their provenance. That distancing however, has proved difficult to do. For the man in question is Rajya Sabha member of Parliament, the 67-year-old Dheeraj Kumar Sahu, who once walked with Rahul Gandhi during the Bharat Jodo Yatra, and comes from a family of lifelong Congressmen.
The IT raids
On the morning of December 6, the first thing that the battalion of IT officials did when they approached the godown of Baldeo Sahu and sons, was to ask the 60-odd people who lived in the premises to hand over their mobile phones. Sleepy, disoriented and stunned, there was no choice but to comply. Then, they began the raid in earnest, going from one room to another. Some in the team were experienced Income Tax officers, not unaccustomed to large cash hauls. But what they saw left them bewildered. “There was cash everywhere, like we were inside the strong room of a bank. There were 11 almirahs which were stuffed full of currency notes. It was nothing like I had ever seen, and definitely not in a nondescript factory that sells out-still (country) liquor,” a senior IT official who was part of the raid said, asking not to be named.
Kept in dark rooms, many of the notes were damp, mildew on their surface. There was the tangible smell of musty paper, so much so that the pungent odour of mahua (used to brew the liquor) paled in comparison. At one point, there was a scare, for they also found a chamber that had at least 6 firearms inside. All were licensed.
They expanded the search to an apartment owned by the Sahu family nearby, where too, they found almirahs of cash. Then they started on bank lockers, and found 40 pieces of gold and diamond jewellery.
The sheer scale of the discoveries presented logistical problems. Trucks and bags had to be arranged so the currency notes could be carried to State Bank of India’s modest Bolangir branch. More than 50 bank officials, from across the district took 35 hours to count the notes, using 25 currency sorting machines, with two machines breaking down during the process. “We not only cancelled the weekend holidays of our own staff in every branch in Bolangir, but had to request more people from nationalized banks. Nobody stopped counting, except for lunch and toilet breaks. Let’s call it a money marathon,” laughs Bhagat Behera, regional manager of SBI in Bolangir.
Who is Dheeraj Sahu?
Born in Jharkhand’s(then Bihar) Lohardaga district, Dheeraj Sahu is one of the six sons of Rai Sahab Baldeo Sahu, industrialist, freedom fighter, and for close to a century, country liquor baron. The Sahus have always been connected to the Congress, with Dheeraj twice contesting the Chatra assembly seat in Jharkhand but having to face defeat. He was then nominated to the Rajya Sabha in June 2009, re-nominated in July 2010 and then May 2018. Of his five brothers, four have dabbled in politics, all with the Congress party. His eldest brother Shiv Prasad Sahu was Ranchi Lok Sabha MP twice in the 1980 and 1984; younger brother Gopal Sahu contested the 2019 elections from Hazaribagh but lost, and Uday Sahu is a Congress party member.
People close to the family said that Baldeo Sahu began the country liquor empire close to a 100 years ago. Sundhis(traditional country liquor brewers) by caste, the Sahus first began operations in the Chhotanagpur plateau around a hundred years ago, brewing liquor using the Mahua procured from tribals of the region. He had a close relationship with Raja Rajendra Narayan Singh Deo, who ruled both principalities of Saraikela (now in Jharkhand) and the Patna princely estate(now known as Bolangir) and was later chief minister of Odisha between 1967 and 1971.
The terrain was perfect. The region was impoverished, but Mahua trees grew aplenty. Baldeo Sahu arrived sometime in the 1930s. “He came to Bolangir when RN Singh Deo gave him a piece of land in Sudapara to begin his first factory. Soon he branched out to neighbouring districts like Sonepur, Kalahandi and Nuapara,” said Artatrana Singh Deo, a member of the erstwhile royal family.
Over the past few decades, patterns of Odisha’s alcohol consumption, like the rest of India have changed, becoming more aspirational, more premium than locally brewed liquor. But there are still pockets such as Bolangir, outside the urban centres like Bhubaneswar and Cuttack, or the more wealthy coastal district, where mahua is the preferred drink of choice. The 2011 census shows that over 88% of the district’s population is still rural, and over 21% is tribal.
In factories such as the one Sahu owns, flowers of the Mahua tree are procured from tribals, fermented and boiled in pots for six hours. The ethyl alcohol which the flowers then emit are distilled through copper pipes as vapour, and then condensed . The decanted liquid is largely colourless. It is then diluted with water, and packed in 200ml pouches that cost ₹35-40. District excise officials said that while it is difficult to put a figure to the quantum of the business that could run into several hundred crores a year, the Sahus created a near monopoly of sorts, owning 46 of the 64 out-still liquor licences in the district. “In neighbouring districts like Kalahandi, Nuapara, Sonepur, Boudh and Sundergarh, they have another 40,” the official said.
Tax officials said that over the last two decades, the family diversified their businesses, branching out into the bottling and blending of IMFL (Indian-made foreign liquor), the manufacturing of fly ash bricks, education, transportation, hospitality and health care. Among the companies they run are the Boudh Distillery Pvt Ltd, Baldeo Sahu Infra Pvt Ltd, Kwality Bottlers Pvt Ltd, Kalika Prasad Bijay Prasad Beverages Pvt Ltd, Ajanta Bottlers & Blenders Pvt Ltd, Sapphire International School in Ranchi, Sushila Automobile Marriage Hall in Ranchi, Santa Beta Hospital and Aum valley school in Titlagarh. In 2019, their ₹500-odd crore venture Boudh Distillery Pvt Ltd where extra neutral alcohol(raw material for all IMFL liquor) is brewed, in Odisha’s Boudh district, was inaugurated by chief minister Naveen Patnaik. The Boudh Distillery Pvt Ltd is the largest supplier of extra neutral alcohol to IMFL outlets in Odisha.
Sahu on Friday said the money recovered by the I-T department “does not belong to any political party”.
“I have been in active politics for the last 30-35 years. The money that was seized was not meant for the Congress or other political parties, but proceeds of sale of liquor,” Sahu said.
“The liquor business mostly runs in cash and the money was kept for payment for Mahua flowers as well as the government. The money is not only mine, but belongs to the entire family and firms of our group. All our businesses are transparent. In the last 100 years, we have given a lot of revenue to the government. I will give account for everything to the I-T department,” he added.
Jharkhand based senior Congress leader Alok Dubey said: “The family has good connections with the Congress and commands respect in Lohardaga. They have dug several ponds and helped solemnise the marriage of several poor people in Jharkhand.”
The source of the cash and the politics
What has however confounded tax officials thus far, as they scour documents recovered from Sahu’s premises, is the question of why so much cash was being hoarded in non-descript godowns and apartments. “Normally, cash like this is invested somewhere. We are trying to understand whether this was just to evade taxes or there is something else. There is some preliminary proof of hawala transactions, over and under-billing. No legitimate business where transactions are recorded and payments and receipts carried out, can justify hoarding so much cash. It will take us time to come to a conclusion,” a second IT official said, asking not to be named.
Excise department officials r said that despite the family’s long years of experience in the country liquor business, it is unlikely that this scale of revenue could be generated from that business alone. “The numbers don’t add up. Of the total excise revenue of ₹6,455 crore that Odisha earned in the last financial year, just over 12% came from the out-still liquor trade,” said Narasingha Bhol, state excise commissioner.
Unsurprisingly, the massive seizures that, at last count, total ₹359 crore have led to a political maelstrom. On December 8, Prime Minister Narendra Modi took to X to ask people to look at the piles of notes, and juxtapose them with the speeches of leaders of the opposition. “Whatever has been looted from the public, every penny will have to be returned. This is Modi’s guarantee,” he wrote in the post.
Union home minister Amit Shah last Monday said, “Crores of rupees have been recovered but the whole INDI alliance is silent on this corruption. I understand the Congress because this is in their nature, but the JDU, RJD, DMK and SP are all quiet too.”
In Jharkhand, from where Sahu is a three-term Rajya Sabha member, state BJP chief Babulal Marandi has alleged the trail of the recovered money will reach the door of Chief Minister Hemant Soren. In Odisha, the BJP has organized street protests over the past week, asking why Chief Minister Naveen Patnaik has failed to order a probe thus far. “When a central agency such as the I-T department can find out about this huge sum of black money, what were the Odisha police, intelligence, excise department and economic offences wing doing?” asked BJP state unit president Manmohan Samal. Both the BJD and JMM have denied the allegations, and distanced themselves from Dheeraj Sahu.
Congress Jharkhand in-charge and All India Congress Committee(AICC) member Avinash Pandey said that the party has sought a clarification from Sahu. “This incident has nothing to do with the Congress and the party has already made it clear that this is a personal matter of Sahu. This is a collective business of his joint family that has been in operation for over a hundred years. Only he can offer information,” said Pandey.
The action has meanwhile moved to Sahu’s Ranchi residence , raided by IT officials earlier this week, and where they even deployed ground scanning radar machines for cash and other valuables that may be buried . To be sure, no such recoveries have been made so far.
In Bolangir earlier this week, under the gently setting sun, the country liquor outlet owned by the Sahus in Gandhinagar Pada continued to do brisk business, people jostling to buy the 200ml pouches for ₹36. As some sat outside and began partaking of it a few metres away, conversation inevitably turned to the mounds of cash they saw on their television screens. One man laughed. “Earlier Bolangir was known for distress migration and drought. Now, nobody can call us poor. Maybe this is progress.”