The Madras High Court on Wednesday ordered a Central Bureau of Investigation (CBI) inquiry into alleged financial irregularities in the procurement of 45,000 distribution transformers by the Tamil Nadu government. The court’s decision comes amid allegations that the state exchequer suffered a massive loss of ₹397 crore between 2021 and 2023.
Decoding the Rs 397 crore allegation
The legal battle centers on the procurement process managed by TANGEDCO (Tamil Nadu Generation and Distribution Corporation). According to petitions filed in the court, the state government allegedly purchased transformers at inflated rates, leading to a significant drain on public funds.
According to the petition filed by AIADMK’s legal wing members alongside an NGO by the name of Arappor Iyakkam, the procurement process was marred by “artificial price escalation” and favoritism. The petitioners alleged that certain firms were favored through restrictive tender conditions, effectively creating a cartel that dictated high prices to the state electricity board.
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The period under scrutiny is 2021 to 2023. As per a PTI report, the procurement occurred during the tenure of Senthil Balaji, who served as the Minister for Electricity under the current DMK government
What did Madras HC say?
While the state government initially defended the procurement as being in accordance with the Tamil Nadu Transparency in Tenders Act, the Madras High Court found sufficient grounds to warrant an independent investigation. A bench comprising Chief Justice S.A. Dharmadhikari and Justice G. Arulmurugan directed that the investigation be handed over to the central agency to ensure a “detailed and fresh” probe.
The court emphasized that when allegations involve high-ranking officials and significant public funds, a probe by a central agency like the CBI is necessary to maintain public trust. The court has ordered the Directorate of Vigilance and Anti-Corruption (DVAC) to transfer all related case files and documents to the CBI within two weeks.
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The judges directed the CBI to conclude the investigation “expeditiously” and take appropriate legal action based on the findings. The bench explicitly ordered TANGEDCO, the DVAC, and the Tamil Nadu state government to extend full cooperation to federal investigators.
Senthil Balaji denies irregularities
Senthil Balaji meanwhile has denied all reports and accusations of financial irregularities. Claiming that there were no irregularities while procuring the transformers, the DMK leader told reporters that the procedures of procurement of transformers started from 1987.
“Same procedures were followed till now”, he added. In his remarks, Balaji maintained that more than 20 bidders participated in the tender process, where several bidders often quote the same price. Senthil Balaji further pointed out that the tender will be finalised by a scrutiny committee and board panel, and would give the purchase order.
Pointing out that even during the previous regime, the same tender procedure was followed, the former electricity minister said the agency has filed the case as if there were irregularities in the last four to five years. “There is no room for irregularities, and there is no loss to the government at this point”, he claimed.
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