Gutkha scam: AIADMK govt faces heat as CBI conducts raids across Tamil Nadu

Health minister, top cop come under CBI scanner

CBI headquarters in New Delhi | Reuters CBI headquarters in New Delhi | Reuters

On September 3, when incriminating reports by the Income Tax Department on the seizures made from Tamil Nadu Health Minister C. Vijaya Bhaskar’s house were leaked to the media, the state government chose to ignore it. Even as there were reports on the minister’s father confessing to taking bribes for offering jobs in the health department, Vijaya Bhaskar maintained silence, so did his boss Chief Minister  Edappadi K. Palaniswami. Sources close to the health minister brushed aside the report terming it as an attempt to tarnish his image.

But on Wednesday, when more than 20 CBI officers knocked at the doors of  Vijaya Bhaskar and Director General of Police T.K. Rajendran, it spelt trouble for both the health minister and the chief minister. In a first of its kind in the history of Tamil Nadu, the central probe agency began searches on Wednesday morning at over 40 places in Chennai, Thiruvallur, Villupuram, Thoothukudi, Puducherry, Bengaluru and Mumbai. 

The special teams, comprising officials of the CBI's Anti Corruption-III Unit in New Delhi, conducted searches predominantly at the residences of the health minister, the DGP and former Chennai police commissioner S. George, former minister B.V. Ramana and others, who are in the radar for allegedly allowing the storage and sale of banned gutkha products in the state.  

The ministers and the IPS officers were allegedly in the payroll, according to a diary seized from one of the gutkha dealers in Chennai during an IT raid in 2016. The residences of police officers who are considered close to Rajendran and George were also brought under the scanner, according to sources in the CBI. A customs officer and a few officials of the Food Safety and Sales Tax Departments were also brought under the scanner, based on the diary notes of MDM brand gutkha manufacturer Madhava Rao. The raids came a day after Rao was interrogated by the probe agency. The CBI officials had reportedly grilled Rao for more than 10 hours on August 30 and recorded his statements on the details of bribe money he had allegedly paid to the top officials. 

The Rs 39. 91 crore gutkha scam

Manufacturing and sale of gutkha products were banned in Tamil Nadu in 2013 by then chief minister Jayalalithaa. She banned the manufacturing, storage and sale of carcinogenic chewable forms of Tobacco, including gutkha and pan masala. However, gutkha and pan masala were continued to be manufactured and sold illegally. 

The gutkha scam came to light in July 2016, when the Income Tax sleuths raided the office and godown of MDM brand gutkha manufacturer. Madhav Rao, the manufacturer of the MDM brand, had allegedly paid several crores of rupees as kickbacks to the Tamil Nadu health minister and several other officials to facilitate the production and sale. After the raids in July 2016, the I-T department unearthed several incriminating documents and found that Rs 39.91 crore was paid as bribe to the minister and the police officers. The I-T department had reportedly sent a report on the seizures from Madhava Rao’s premises to the then chief secretary P.S. Rama Mohana Rao. The chief secretary had forwarded the reports to the chief minister, but no action was taken.

In 2017, the pay off list was leaked to the media and the opposition DMK took it to the Madras High Court. Subsequently in September 2017, the Directorate of Vigilance and Anti-Corruption (DVAC) registered a case and began investigation. The DVAC, however, failed to file a charge sheet within the stipulated six months time. In November 2017, a copy of the I-T report on gutkha pay offs was seized by the IT department during the searches at Jayalalithaa’s residence in Poes Garden. 

This time, the DMK went to the Madras High Court seeking a speedy probe into the gutkha scam. As the DVAC failed to file the charge sheet, the case was transferred to the CBI. The CBI registered a case in May this year and started investigations. The agency had also written to the Income Tax department, DVAC and other agencies to share the documents relating to the case. 

The CBI has registered a fresh case, eschewing the usual practice of adopting the First Information Report of the state. The case has been registered against “unknown officials” of the Central Excise Department, Government of Tamil Nadu, Food Safety Department officials, other public and private persons under Section 120 B of the IPC which amounts to criminal conspiracy.  The CBI has also invoked provisions under the Prevention of Corruption Act, 1988. 

According to highly placed sources, after the searches, some of the top police officials and even the minister might be summoned by the CBI to Delhi for interrogation, which will be yet another embarrassing moment for the AIADMK government.