The Enforcement Directorate (ED) on Wednesday arrested Aam Aadmi Party (AAP) parliamentarian Sanjay Singh after questioning him during a day-long raid at his residence in connection with alleged irregularities in Delhi’s now-scrapped excise policy, sparking a political firestorm.

Singh, a 51-year-old member of the Rajya Sabha, was arrested under the Prevention of Money Laundering Act (PMLA) for allegedly playing a key role in procuring favours for himself and certain businessmen through his aides by influencing the 2021 policy.

“We have found robust evidence which reveals that Sanjay Singh benefitted from the excise policy through his aides. He was not cooperating in the probe since the beginning,” said an officer from the federal agency, without quantifying the kickbacks allegedly linked to the politician or divulging details of the money trail.

The MP — who is the second senior AAP leader to be arrested in the case after former deputy chief minister Manish Sisodia in February this year — will be produced before a court in Delhi on Thursday.

“Today, ED suddenly arrived at my residence and carried searches throughout the day but nothing was recovered. Despite this, I am being forcibly arrested. Now, a lot of fake stories and news will be planted,” Singh said in a video statement issued moments before he was arrested .

Delhi chief minister Arvind Kejriwal went to Singh’s North Avenueresidence on Wednesday evening and said the arrest was illegal. “This shows Modi ji’s nervousness. They will arrest many more opposition leaders before the elections,” Kejriwal said on X.

“Sanjay Singh is the strongest voice against Narendra Modi’s corruption in the country. Initially, he (the PM) got Sanjay Singh suspended from the Parliament, and today he was arrested in a completely fake case,” the CM added.

Other opposition parties backed Singh.

Samajwadi Party chief Akhilesh Yadav said, “Opposition leaders are well-prepared now. It is nothing new. It is fortunate that those elected by the people are doing ‘injustice.”

Shiv Sena (UBT) MP Sanjay Raut said, “Raids are conducted on us, it happens in Maharashtra, West Bengal, Chhattisgarh, Jharkhand but why are there no raids in Gujarat, Madhya Pradesh, Assam and others where they (BJP) are in power?”

The Bharatiya Janata Party (BJP) hit back. Union minister and BJP MP from New Delhi Meenakashi Lekhi said that the arrest of the AAP leader is part of the steps being taken towards building a ‘Bhrashtachaar Mukt Bharat’ (corruption-free India).

Singh’s arrest is connected to the excise policy in which the federal agency allege kickbacks were paid. The policy was rolled out for the 2021-22 financial year in November 2021, marking the exit of the government from retail sales of alcohol and allowing private companies to bid for licenses. The objective, the Delhi government said, was to improve the buying experience for citizens by allowing market competition to raise standards.

But the policy was scrapped when Delhi’s lieutenant governor VK Saxena asked for an investigation, citing a report by the chief secretary who alleged irregularities. The AAP and the Capital’s elected government have rejected the charges, alleging it to be a ploy by the BJP-controlled Union government to target its rival.

ED has so far arrested 14 people, including Sisodia and Singh, and filed five prosecution complaints (or charge sheets). The Central Bureau of Investigation (CBI), which is conducting a parallel corruption probe in the matter, has filed two charge sheets in the case.

Singh was not named as an accused in any of the charge sheets, but agency officials have said on multiple occasions that he was under the scanner.

His wife Anita said ED searched their house, computers and documents, but did not find anything. “They arrested him because there was pressure on them. They (ED) did not give us any reasons for the arrest. We are all with him, he should continue the fight,” she added.

The ED officer cited above said that Singh played a key role in the excise policy, which investigators allege benefited certain liquor manufacturers, wholesalers and retailers.

Sisodia was arrested in February by CBI and was later taken into custody by ED. He continues to be in Tihar jail. Former health minister Satyender Jain was arrested in May 2022in a separate money laundering probe.

The federal agency alleged that ₹100 crore was paid to AAP leaders by a so-called south group that was awarded nine retail zones in Delhi. This group comprises YSR Congress parliamentarian Magunta Sreenivasulu Reddy (or MSR), his son Raghav Magunta, Sarath Reddy (promoter of Aurobindo Group), and K Kavitha (daughter of Telangana chief minister K Chandrashekar Rao) and businessman Sameer Mahendru, according to ED.

Singh’s arrest came a day after a Delhi court allowed restaurateur Dinesh Arora and Raghav Magunta to become approvers in ED’s excise case. Arora had earlier become an approver for CBI but ED arrested him in July, raising eyebrows as agencies normally do not arrest each other’s approvers.

The statements given by Dinesh Arora, who claims he was a close aide of Singh, played a key role in Wednesday’s arrest, according to the ED officer cited above.

In its May charge sheet, ED said Dinesh Arora was “extremely close” to Singh and met Sisodia through the parliamentarian during a party at his restaurant in Connaught Place.

In 2020, ED said, Dinesh Arora received a call from Singh asking him to seek funds from other restaurateurs for the AAP ahead of the assembly elections.

“On request of Singh, he spoke to many of the restaurant owners and arranged cheques amounting to ₹82 lakh (handed over to Sisodia) for collection of party funds for upcoming assembly elections in Delhi,” the ED charge sheet said.

Another businessman, Amit Arora, met Singh in 2020 at the latter’s house, the charge sheet said.

At the time, Delhi’s excise policy rules prescribed only a minimum sale criterion, which was low and favoured local brands that could push particular brands though their brands were non-existent in other markets. Amit Arora sold relatively higher-end products that struggled in Delhi because of government-controlled retail stores. By inserting a clause in the new policy, Amit Arora wanted to get a better space in Delhi’s liquor business, the charge sheet said.

The agency alleged there was a “quid pro quo between Amit Arora, Dinesh Arora, and Singh and Sisodia. In May, the anti-money laundering probe agency carried out searches on two aides of Sanjay Singh – Ajit Singh and Sarvesh Mishra.

“AAP will continue to fight. It’s not a fight to bring Sanjay Singh or Manish Sisodia or Satyendar Jain out of jail but to save the Constitution,” said the party’s Kalkaji MLA Atishi.