Tamil Nadu: ED reveals Rs 1,000 crore irregularities in TASMAC

The Enforcement Directorate on Thursday revealed that it had discovered a large-scale scam in Tamil Nadu State Marketing Corporation Limited (TASMAC) and its associated entities. The agency has seized several incriminating documents during the recent search operation carried out at various premises in the offices of TASMAC, distilleries and breweries across Tamil Nadu for various offences related to misappropriation of funds. The search operations have revealed that black money racket to the tune of  “over ₹ 1,000 crore.”

In a press statement released on Thursday, the ED said that it initiated an investigation on the basis of multiple FIRs registered under various sections of the Prevention of Corruption Act, 1988. 

These FIRs were registered by the Directorate of Vigilance and Anti Corruption in Tamil Nadu under categories like the TASMAC shops collecting excess amount than the actual MRP, distillery companies offering kickbacks to the officials of TASMAC for supply orders, senior officials of TASMAC indulging in collection of bribes from the retail TASMAC shops and for transfer and posting of TASMAC staff, TASMAC offices. The FIRs were taken after raids, which ran continuously for five days from March 6 to March 10. 

During the search action, according to the ED, incriminating data related to transfer and postings in the state-owned TASMAC, transport tender, Bar Licence Tender, indent orders favouring few distillery companies, an excess charge of ₹ 10 to 30 per bottle by the TASMAC outlets involving the officials of TASMAC were recovered. 

The release also said that it had 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 ₹ 100 crore annually to transporters.”

The ED also said that it had tumbled upon evidence related to the manipulation of tender conditions in the allocation of bar license tenders by TASMAC. “Applicants without any GST/PAN numbers and without any proper KYC documentation were allotted the final tenders,” ED said in the press statement. 

The third evidence revealed by ED is the undue favours by TASMAC higher officials to the distillery companies by way of direct communication between distillery companies and higher TASMAC officials. 

“The above findings establish the occurrence of various offences under the Prevention of Corruption Act, 1988 and generate Proceeds of Crime (POC) as defined under the provisions of PMLA, 2002. Searches 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,” the press note reveals. 

The bottling companies, according to the ED, played a critical role in the “fraudulent scheme by inflating sales figures,” by way of 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. Further, the role of employees/associates related to TASMAC, Distillery and Bottle-making companies along with other key associates in the illicit affairs related to TASMAC are being examined or probed,” the ED said. 

The agency is also pursuing further investigation in the case and associates the incriminating evidence with a larger scam. 

Political fallout

Incidentally, Tamil Nadu BJP chief K. Annamalai said that the liquor scam will rattle the state. He said like in Chattisgarh and Delhi, the liquor scam will topple the government and pave the way for the BJP rule. 

“The DMK got benefits of ₹ 1,000 crore through this scam, and they have hoarded the money in all districts to use ahead of the 2026 Assembly elections. We will only focus on this scam for the next year and not on other issues,” Annamalai said, even before the ED could officially announce the enormity of the scam.

Incidentally, in Tamil Nadu, Annamalai is considered the 'bête noire' of prohibition and excise minister V. Senthil Balaji, who made him lose two elections in a row from Aravakurichi in Karur district and from the Coimbatore Lok Sabha constituency. 

Balaji is the district election in charge of the DMK in Coimbatore while he is the DMK party’s district secretary in Karur. Annamalai, even before the 2021 elections said that he would break the teeth of Balaji. And later, in 2023, ahead of the Lok Sabha polls Annamalai said that the ED would arrest Balaji. Following his statement ED conducted raids at Balaji’s residence and he was arrested subsequently. Though Balaji is out on bail now, the Supreme Court will soon hear ED’s petition to cancel his bail.

Balaji is considered to be the DMK strongman in West Tamil Nadu who can help the DMK win more than 30 MLAs from this region.