The Tamil Nadu government, on Wednesday, March 19, approached the Madras High Court seeking its intervention in the probe launched by the Directorate of Enforcement (ED) in connection with alleged financial irregularities in Tamil Nadu State Marketing Corporation (TASMAC) to the tune of Rs 1000 crores.
The state alleged that the ED is attempting to conduct a roving enquiry into the affairs of TASMAC without reasonable cause or material evidence suggesting involvement in the commission of offenses under the Prevention of Money Laundering Act, 2002 (PMLA). TASMAC is owned by the Tamil Nadu government and has a monopoly over sales of alcoholic beverages in the state.
TNM, in our weekly newsletter Powertrip, dated March 11, had reported that the large-scale raids conducted by the ED had rattled the state government.
The petition was filed by Home Secretary Dheeraj Kumar and TASMAC Managing Director Visakan, alleging harassment of TASMAC employees during searches and conducting a probe in a “wholly arbitrary and high-handed manner”. They sought the court to issue directions to the ED not to harass employees of TASMAC.
Dheeraj Kumar stated in the petition that the ED’s search operations in the TASMAC Headquarters began with an illegality. “Search warrant/memo was merely shown to the officials of the TASMAC and a copy of the same was not given to any of the officials,” he said.
Top officials including the Managing Director, General Manager (Administration and Wholesale) who is a woman officer, and General Manager (Retail and Vending) of TASMAC were allegedly detained continuously for 60 hours in their office without any communication sent to their family members. The ED search reportedly began during the morning hours on March 6 and ended at 1 am on March 8.
Further, the petition said that signatures of TASMAC officials were obtained on documents that included oral statements of the Managing Director, General Manager (Administration and Wholesale), Deputy General Manager (Purchase and Sale); more than 100 questions on the tender process; price fixing of FL2 liquor licenses; and other details. “All these statements are not valid under the eyes of law for having been recorded under illegal detention, threat, and coercion,” the petition added.
The Tamil Nadu government also alleged that all documents pertaining to the TASMAC bar tenders, transport tender process, tender conditions, details of successful bar tenderers, and reports on actions taken on MRP violations pertaining to the last four year period were forcibly seized from the head office of the TASMAC.
The petition also mentioned that in an egregious violation of privacy and due process, the ED forcibly seized the mobile phones of all employees and proceeded to unlawfully access, copy, and extract data including personal information from these devices with the assistance of multiple digital forensic examiners who were specially summoned for this purpose.
“The unauthorised and invasive action constituted a manifest breach of employees’ right to privacy, and the prolonged unlawful detention, deprivation of rest, and basic amenities, and the unauthorised access to personal data demonstrate a shocking disregard for the rule of law and the fundamental rights of the employees,” read the petition.
Visakan, Managing Director of TASMAC,alleged that officials at the head office were unlawfully detained and the employees were neither informed of the reasons for their detention nor provided an opportunity to consult legal counsel.
He further alleged that TASMAC officials were neither furnished with a copy of the Enforcement Case Information Report (ECIR) nor the details of the investigation were shared with them. The ED had launched a probe based on multiple FIRs registered against the officials and employees of TASMAC.
The ED had, on March 14, said that they have unearthed a large-scale financial fraud in TASMAC amounting to Rs 1,000 crore. Through a press statement, the ED said that it had gathered incriminating evidence related to TASMAC staff transfers and postings, irregularities in transport tenders, and manipulations in bar-related tenders.
The ED said that glaring irregularities in the transport tenders were evident from the mismatch between the KYC details of the applicant and the Demand Draft (DD). The successful bidder had not obtained the DD before the application date, the ED said.
"Evidence reveals direct communication between distillery companies and senior TASMAC officials, exposing efforts to secure increased indent orders and undue favors," ED said. The agency has alleged that several distilleries including SNJ, Kals, Accord, SAIFL, and Shiva Distillery, along with bottling units like Devi Bottles, Crystal Bottles, and GLR, had been making illicit payments and that they were generating unaccounted cash.
Read: Tamil Nadu: ED alleges Rs 1,000 crore scam in TASMAC, likely to summon officials