Kavitha, 46, a Telangana Legislative Council member, was arrested by the central probe agency at 5:20 pm from her residence at Banjara Hills in Hyderabad, according to the arrest memo. Her husband D R Anil Kumar was informed about her arrest, ED officials said.Agency sources said the BRS leader was being brought to Delhi for questioning.

The ED questioned Kavitha thrice last year in this case and again summoned her this year but she did not depose citing a Supreme Court direction that allowed her protection from any coercive action.

He alleged that the move was “pre-planned” and said they would protest against it.

The Enforcement Directorate had claimed Kavitha was linked to a “South Group” lobby of liquor traders who were trying to play a larger role under the now scrapped Delhi excise policy for 2021-22.

It alleged that one of the accused in the case, Vijay Nair, received kickbacks to the tune of at least Rs 100 crore on behalf of AAP leaders from the “South Group”, allegedly controlled by Sarath Reddy, Kavitha and Magunta Srinivasulu Reddy.

In the last round of questioning by the ED, officials said, Kavitha was confronted with Hyderabad-based businessman Arun Ramchandran Pillai, who was arrested in the case earlier and allegedly shared close ties with her.

Kavitha has then asserted that she had done nothing wrong and alleged that the Centre was “using” the ED as the BJP could not gain a “backdoor entry” into Telangana.

The “South Group”, according to the ED, comprises Sarath Reddy (promoter of Aurobindo Pharma), Magunta Srinivasulu Reddy (YSR Congress MP from Ongole Lok Sabha seat in Andhra Pradesh), his son Raghav Magunta, Kavitha and others.

The ED also alleged in Pillai’s remand papers that he “represented the benami investments” of Kavitha in the case.

Kavitha was earlier questioned by the Central Bureau of Investigation (CBI) in connection with the case at her residence in Hyderabad.

The ED also recorded the statement of Butchibabu, an accountant allegedly linked to Kavitha.

According to the ED, the accountant said that “there was political understanding between K Kavitha and (Delhi) chief minister (Arvind Kejriwal) and (then Delhi) deputy chief minister (Manish Sisodia). In that process, K Kavitha also met Vijay Nair on March 19-20, 2021”.

Nair was arrested in the case by both the ED and the CBI.

The agency alleged the Delhi government’s excise policy for 2021-22 to grant licences to liquor traders allowed cartelisation and favoured certain dealers who had allegedly paid bribes for it, a charge strongly refuted by the AAP.

The policy was subsequently scrapped and the Delhi lieutenant governor recommended a CBI probe, following which the ED registered a case under the Prevention of Money Laundering Act (PMLA).