Hyderabad, Jan. 23 -- The Enforcement Directorate (ED) on Wednesday grilled former YSR Congress party leader and ex-Rajya Sabha MP V Vijay Sai Reddy for nearly seven hours in connection with the Rs.3,500 crore liquor scam that allegedly took place during the regime of former Andhra Pradesh chief minister Y S Jagan Mohan Reddy, people familiar with the matter said.

A three-member team of ED officials questioned Sai Reddy at their Hyderabad office extensively on the formulation and implementation of the liquor policy, alleged illegal cash collections, suspected hawala transactions, and the routing of funds through shell companies.

An official privy to the development said the investigators sought explanations from the former MP on why lar...