ED Raids TASMAC Offices, Distilleries In Tamil Nadu; Uncovers Rs 1,000 Crore Financial Fraud

Chennai: The Directorate of Enforcement (ED), Chennai, conducted search operations on March 6 across multiple locations in Tamil Nadu under the provisions of the Prevention of Money Laundering Act (PMLA), 2002. The raids targeted various entities and individuals linked to the Tamil Nadu State Marketing Corporation Limited (TASMAC) for alleged financial irregularities and corruption.

The ED initiated its probe based on multiple FIRs registered under various sections of the Prevention of Corruption Act, 1988. The key allegations include:

Overcharging at TASMAC Shops: Retail outlets collecting amounts exceeding the Maximum Retail Price (MRP).

Kickbacks from Distilleries: Distillery companies allegedly offering bribes to TASMAC officials in exchange for supply orders.

Bribery for Transfers & Postings: Senior TASMAC officials reportedly taking bribes for staff transfers and postings.

Key Findings from TASMAC Office Searches

During the raids, officials recovered incriminating documents and data related to:

• Transfer postings, transport tenders, bar licence tenders, and indent orders favouring select distillery companies.
• Overcharging at TASMAC outlets, with an excess charge of Rs 10-30 per bottle involving TASMAC officials.

Some major irregularities uncovered

1. Manipulated Transport Tenders: Evidence suggests that tenders were awarded despite only having a single applicant in the final bid. In some cases, the KYC details of applicants did not match the Demand Drafts (DDs) submitted. TASMAC paid over Rs 100 crore annually to transporters.
2. Irregular Bar Licence Tenders: Licenses were issued to applicants without GST/PAN details or proper KYC documentation.
3. Direct Collusion with Distilleries: Communication records reveal that distillery companies directly influenced TASMAC officials to secure increased supply orders and other undue favours.

These findings point to violations under the Prevention of Corruption Act, 1988, generating Proceeds of Crime (POC) under PMLA, 2002.

Distilleries & Bottling Companies Under Investigation

Raids on major distillery companies--SNJ, Kals, Accord, SAIFL and Shiva Distillery--along with bottling units such as Devi Bottles, Crystal Bottles and GLR Holding exposed large-scale financial fraud.

• Investigations revealed that distilleries inflated expenses and created bogus purchase records, particularly through bottle-making companies, to siphon off over Rs 1,000 crore in unaccounted cash.
• These funds were allegedly used to pay kickbacks to TASMAC officials in exchange for increased supply orders.
• Bottling companies played a key role by falsifying sales figures and routing excess payments, which were later withdrawn as cash, after deducting commissions.

The ED's findings indicate a well-planned network of financial manipulation, involving concealed cash flows, inflated expenses, and systematic tax evasion.

The role of TASMAC employees, distillery and bottle-making company associates, and other key individuals in these illicit operations is currently under investigation. Further probes are underway, according to an official ED statement.

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