Senthil Balaji Launches Scathing Attack on ED

Tamil Nadu Excise Minister V. Senthil Balaji on Friday afternoon strongly denied the Enforcement Directorate's claims of  "irregularities" in tender processes, and a possible fraud of Rs 1,000 crore, within the Tamil Nadu State Marketing Corporation (Tasmac), the state-run liquor sales agency.

Balaji told reporters, "ED has given no details of the FIRs on basis of which it has acted. There is no corruption in transfer or transportation (of cash) ... the alleged irregularities are by bottling firms outside Tasmac..and the Tamil Nadu government has no role in this."

"The ED is motivated. It released its statement to defame the Tamil Nadu government ahead of the budget speech. This Rs 1,000-crore corruption allegation is baseless," he was firm.

Subsequent to its search operations that begin on March 6 which went on for over 3 days at various premises across many districts of Tamil Nadu for various offences related to Tasmac, the Enforcement Directorate has said bottling companies played a critical role in this fraudulent scheme by inflating sales figures, allowing distilleries to route excess payments, which were later withdrawn in cash and returned after deducting commissions.

This collusion between distilleries and bottling companies was done through manipulation of financial records, concealed cash flows, and systematic evasion. The findings confirm a network where unaccounted cash was deliberately generated through inflated and bogus expenses and subsequently utilised for purposes leading to huge profits, said the ED report.

It also added that the role of employees and other associates related to Tasmac, distillery and bottle-making companies along with other key associates in the illicit affairs related to Tasmac are being examined.      

It also mentioned that during its search action in the offices of Tasmac, incriminating data related to transfer postings, transport tender, bar licence tender, indent orders favouring few distillery companies, excess charge of Rs 10-30 per bottle by the Tasmac outlets involving the officials have been recovered.

It has found evidence of manipulation in Tasmac's transport tender allocations. A glaring issue is the mismatch between the KYC details of the applicant and the Demand Draft (DD), suggesting that the final successful bidder did not even obtain the requisite DD before the application deadline. Additionally, tenders were awarded despite having only a single applicant in the final bid. Tasmac paid over Rs 100 crore annually to transporters.

In the allocation of bar license tenders by Tasmac, evidence related to the manipulation of tender conditions were also found, claims ED. One such glaring issue is that the applicants without any GST/PAN details and without any proper KYC documentation, were allotted the final tenders. Evidences reveal direct communication between distillery companies and senior Tasmac officials, exposing efforts to secure increased indent orders and undue favours. The above findings establish the occurrence of various offences under the Prevention of Corruption Act, 1988 and generate Proceeds of Crime  as defined under the provisions of PMLA, 2002.

Besides, the ED claims searches also revealed large-scale financial fraud involving distillery companies - SNJ, Kals, Accord, SAIFL, and Shiva Distillery- along with bottling entities such as Devi Bottles, Crystal Bottles, and GLR Holding, exposing a well-orchestrated scheme of unaccounted cash generation and illicit payments.

Investigations reveal that distilleries systematically inflated expenses and fabricated bogus purchases, particularly through bottle-making companies, to siphon off over Rs.1,000 Crore in unaccounted cash. These funds were then used for kickbacks to secure increased supply orders from Tasmac.