The Directorate of Vigilance and Anti-Corruption (DVAC) on Wednesday, July 29, registered a corruption case against former Tamil Nadu minister and DMK MLA V Senthil Balaji, alleging large-scale irregularities in the functioning of the Tamil Nadu State Marketing Corporation (TASMAC) between 2021 and 2025. The agency also questioned the former minister while conducting simultaneous searches at more than 40 locations across the state linked to the alleged scam.
This is the second FIR registered against Senthil Balaji since the TVK government assumed office. Earlier this month, he was booked in connection with the alleged attempt to poach TVK MLAs.
The DVAC booked seven accused, including Senthil Balaji, former TASMAC Managing Director and IAS officer S Visakan, Balaji's close associate Rathesh Raj Shanmugavel, former TASMAC officials R. Ramadurai Murugan and R. Panneerselvam, Balaji's former personal assistant Bhaskar, and S Karthik.
According to the FIR, the accused entered into a criminal conspiracy to manipulate TASMAC's functioning by rigging bar and transport tenders, favouring select liquor manufacturers, facilitating overpricing of liquor, influencing transfers and postings of officials, and causing substantial financial losses to the state exchequer.
The agency alleged that TASMAC officials, acting at the behest of Senthil Balaji and his associates, violated tender norms while awarding bar licences in Coimbatore, Tiruppur, Erode, Namakkal, Karur and the Nilgiris by favouring selected bidders.
It further alleged that 284 bars shown as closed continued to operate without licence renewals during 2022-23 in Coimbatore North, Coimbatore South and the Nilgiris, resulting in a revenue loss of over Rs 32.81 crore.
The DVAC also alleged irregularities in transport contracts for TASMAC depots, claiming officials misused earnest money deposit demand drafts submitted by one bidder to award contracts to others. Organised syndicates allegedly controlled bar licences through proxy operators with political backing.
According to investigators, certain distilleries and bottle manufacturing firms generated unaccounted cash through inflated invoices and bogus purchases, which was allegedly used to pay kickbacks for securing liquor supply orders from TASMAC.
The agency also alleged that TASMAC outlets routinely collected amounts over and above the maximum retail price, with excess collections ranging up to Rs 500 for premium liquor brands and between Rs 10 and Rs 500 for other brands.
The FIR identified Rathesh Raj Shanmugavel as a key intermediary who allegedly exercised unofficial influence over TASMAC's functioning. The DVAC claimed that then Managing Director S. Visakan acted on Rathesh's directions under instructions from Senthil Balaji, particularly in matters relating to liquor brand approvals, bar licence tenders and administrative transfers.
In Karur, the agency alleged that a group referred to as the "Karur Gang", led by S Karthik, controlled bar operations and pressured TASMAC officials to allot bar licences to preferred persons across the state. The FIR further alleged that politicians claiming links with the group collected party funds from bar owners.
The investigation was launched after the DVAC examined documents produced in various court proceedings, including material relied upon by the Enforcement Directorate (ED) in its probe into the alleged Rs 1,000-crore TASMAC liquor scam.
The ED had earlier alleged that distilleries siphoned off more than Rs 1,000 crore in unaccounted cash through fabricated invoices and bogus purchases to secure higher liquor supply orders from TASMAC. The then DMK government had challenged the ED investigation before the Supreme Court, which stayed the probe.
Simultaneously, on Wednesday, DVAC teams carried out searches across 41 locations including Chennai, Coimbatore, Tiruppur, Erode and the Nilgiris, according to this report.
Senthil Balaji's ancestral residence at Rameswarapatti in Karur was also raided. The former Minister’s father Velusamy was also questioned by the authorities, The Hindu reported.