Babu, who had unsuccessfully contested from Thripunithura in the May 16 assembly polls, was already facing a vigilance enquiry in the bar bribery case over the charge that he had accepted Rs 10 crore as bribe for renewal of licenses of bars.
The present inquiry was ordered on basis of complaints submitted by Kerala Hotel Industrialist Association (KHIA).
"I have ordered a quick verification against K Babu. The enquiry was ordered based on complaints of alleged irregularities in awarding bar licenses, giving permission to open new bars and in levying of bar license fee during his tenure as excise minister," Jacob Thomas told PTI.
It also alleged that "the minister and his office were involved in serious corrupt practices to the tune of more than Rs 100 crore by illegally accepting bribe for issuing fresh FL3 (liquor) and FL11 (beer and wine) licenses during 2011-16 to the new hotel and entrepreneurs.