Explained: Troubles with TASMAC and Enforcement Directorate raids in Tamil Nadu

The dust has still not settled in TASMAC, the state-owned liquor marketing department. The Enforcement Directorate raids and the investigation, which ran for over five days, to dig into the entire gamut of liquor policy and trade in Tamil Nadu seem to have shaken the DMK-led government in Tamil Nadu. Searches were conducted at the distilleries and breweries in Chennai and Coimbatore, at the residence and offices of friends of Excise and Prohibition Minister V. Senthil Balaji at Karur, at the head office of TASMAC at Egmore in Chennai, regional offices and residences of TASMAC managing director S. Visakan IAS, and few other top officials linked to TASMAC. The raids which began on March 6 went on till March 9.

Though the searches have come to a close and the ED officers have left the premises, TASMAC district officers across the state were asked to gather and collate data about bar licences, purchase and sales indents, licences of breweries and distilleries. The data, according to sources, has been submitted to the probe agency. The district managers also collected data on daily sales and other financial records of all the 4,829 TASMAC retail outlets in the state and submitted the same to the agency through the managing director's office.

The CAG report tabled in the state assembly in June 2024 revealed that outlets of TASMAC did not pay the differential excise duty of close to Rs 30.5 crore due to the revision of rates of Indian Made Foreign liquor, even as the MRPs were revised. It also flagged several other issues like cash-based billing, over-charging and lapses in e-procurement system, which sources say, were looked into during the five-day searches by the ED officials. The officers asking for data on sales and financial records of the 4,829 TASMAC outlets apparently point to the issues flagged in the CAG report. While TASMAC fetches Rs 44,000 crore as annual revenue for the government, the ED officers had questions on the liquor policy followed by the state and how the trade is executed. ED officials questioned Visakan IAS on policy, trade, purchase from distilleries, sales and billing.

The officers also conducted raids at distilleries like Accord, SNJ and Kals. Accord is owned by DMK MP Jagathrakshakan, while SNJ is owned by S.N. Jeyamurugan who is said to be close to the DMK first family. Sources say that at least 41 FIRs resisted by the Directorate of Vigilance and Anti Corruption (DVAC) against the discrepancies in purchase and sales in TASMAC, in the past 15 years, were taken as the basis for the investigation by the ED officials. Out of the 41 FIRs only seven have been filed after the DMK came to power in 2021. Most FIRs pertain to the days when AIADMK’s Natham R. Viswanathan and P. Thangamani were ministers. It may be recalled that the ED had conducted raids at TASMAC outlets in key districts and seized several incriminating documents then.

However, the investigation also extended to the bar licences issued through a tender process across the state in 2023. The ED enquired about the details with regard to the selection process for giving out bar licences, details of the bar owners across Tamil Nadu, their political affiliations, MRP violations, bar procedures, liquor procurement, and information on breweries, distilleries, and FL2 (Recreation Clubs) and FL3 (Star hotels) licensees, including their addresses.

Sources say that the ED searches actually hint at a broader probe to look for a Delhi liquor policy scam like case, while investigating the TASMAC operations as a whole, the financial dealings and the revenue management. ED also raised questions over the QR-code based billing system implemented by the retail outlets.

The searches were also conducted at Kongu Mess, Sakthi Mess and at the residences of the owners of these outlets on March 6; but these did not yield any results.The owners of these two restaurants in Karur are also friends of Senthil Balaji and have been under the ED scanner even before the arrest of Balaji in the cash-for-job scam case. Searches were also conducted at the residence of Shankar Anand, in Karur, who is considered to be a close aide of Balaji, Sources say the raids were conducted at their residences only to intimidate Balaji, even when they weren't directly linked to the liquor trade in the state.

A team of around 35 officers from Kerala, Delhi and Andhra conducted searches simultaneously to assess the financial irregularities in TASMAC. However, DMK sources say that the raids did not yield anything as expected by the agency, and this was a prelude to the upcoming raids and searches in the run up to the 2026 elections. The raids, sources say, were targeted at Balaji who is already on bail in the cash-for-job scam case.

Balaji’s return from the jail and his performance in Coimbatore and Karur in the past six months are expected to help the party win big in West Tamil Nadu where it had lost close to 41 seats in the 2021 elections. According to sources, the DMK is aiming to win at least 30 out of the 41 seats in this region and trounce the AIADMK and the BJP.