The Madras High Court on Wednesday ordered a Central Bureau of Investigation investigation into the allegations $Money laundering worth Rs 397 crore in procurement of distribution transformers by Tamil Nadu Generation and Distribution Corporation (Tangedco) between 2021 and 2023.
A bench of Chief Justice SA Dharmadhikari and Justice G Arul Murugan directed the state Directorate of Vigilance and Anti-Corruption (DVAC), which had been investigating the matter so far, to “hand over” all papers and records related to the case to the CBI.
The authority also said that the Iraqi Central Bank should conduct its investigation “seriously and expeditiously.”
The court issued directions on a public interest litigation (PIL) filed by Chennai-based NGO and anti-corruption group ‘Arappor Iyakkam’, and a separate plea filed by AIADMK member E Saravanan, seeking an independent probe into the case.
The petitioners had told the court that Tangedco had falsified the value of the tenders $1,182.88 crore to procure 45,800 transformers for the state. They claimed that the tender process showed signs of cartelization, with bidders fixing prices in advance and eliminating competition.
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Suresh’s lawyer Arapor Iakam told the court that according to the NGO’s analysis of the bids, in seven of the 10 tenders, more than 30 companies offered the exact same price, down to “identical decimal points”.
He said that after negotiations, these companies reduced their prices by approximately the same margin. Such consolidation is “close to zero probability” in a competitive market and means some collusion among bidders, Suresh said.
The petitioners alleged that Tangedco purchased transformers at prices up to 50% higher than the prevailing market prices, causing a loss of about 50% of the market prices. $397 crores to the state exchequer.
The NGO also informed the court that it had filed a complaint with the Domestic Violence Commission in July 2023 seeking a detailed investigation, but the agency had not registered any case even after more than 30 months.
It sought an independent probe under the supervision of the court and appointed Dravida Munnetra Kazhagam (DMK) V Senthilbalaji, former Tangedco chairman Rajesh Lakhone, and Comptroller (Procurement) V Kasi as nodal officials involved in the decision-making process.
During the previous hearings, the court asked DVAC to submit a status report on its preliminary investigations and called for the preparation of minutes of tender committee meetings. The authority also questioned how state officials could liquidate contracts of this size despite clear red flags in pricing patterns.
But the state government denied these accusations. She also argued that the petition was filed with ulterior motive by people belonging to other political parties during the ongoing elections, and urged the court to dismiss the petitions.
