The BRICS TimesThe Madras High Court has directed the Central Bureau of Investigation to probe alleged financial irregularities worth nearly ₹397 crore linked to transformer procurement by Tamil Nadu’s power distribution body TANGEDCO between 2021 and 2023, with former Electricity Minister V Senthil Balaji and a top official named as suspects.
A Court Puts the Spotlight on a ₹397 Crore Scandal
The Madras High Court has stepped in and stepped hard by ordering the CBI to investigate alleged money laundering tied to transformer purchases made by the Tamil Nadu Generation and Distribution Corporation Limited, commonly known as TANGEDCO. The court’s move comes after public interest petitions accused officials of causing a massive loss to the state treasury through inflated contracts.
The petitions were filed by Chennai-based anti-corruption NGO Arappor Iyakkam and AIADMK functionary Saravanan. They sought registration of a First Information Report and the formation of a Special Investigation Team directly under the court’s watch to dig into the alleged scam.
Nearly 28,000 Transformers, Massive Alleged Loss
Between 2021 and 2023, TANGEDCO procured close to 28,000 distribution transformers through ten tenders floated on the state’s procurement portal. The total bid value crossed ₹1,182 crore but petitioners allege around ₹397 crore was siphoned off through manipulated tendering.
Arappor Iyakkam’s affidavit pointed out a glaring red flag 36 different contractors had quoted the exact same price across tenders. Not even a minor variation was observed. Such uniform pricing, experts say, strongly suggests price-fixing or bid-rigging among vendors.
Former Minister and Senior Official Named
The petitioners alleged clear prima facie evidence implicating former Electricity Minister V Senthil Balaji and Rajesh Lakhoni, who was TANGEDCO’s Chairman and Managing Director at the time. Counsel V Suresh, arguing on behalf of the petitioners, told the Division Bench that contracts were awarded at artificially bloated rates leading directly to enormous losses for the public exchequer.
He further noted that complaints had been filed as far back as 2023. Yet no action was taken for over four months which is what pushed petitioners to approach the High Court directly.
State Defends Procurement Process
The State government pushed back through its Advocate General PS Raman. He told the court that DVAC the Directorate of Vigilance and Anti-Corruption was already conducting a preliminary inquiry. He further argued that the tendering process followed procedures in place since 1987 and that contractors had maintained uniform prices for many years.
However, the bench comprising Chief Justice MM Shrivastava and Justice G Arul Murugan was not entirely convinced. The court pointed to a clear Supreme Court ruling: preliminary inquiries are not mandatory in corruption cases. It observed that repeated preliminary inquiries without any forward movement could hamper the effective conclusion of legal proceedings.
Court Asks DVAC to Produce Records
The Division Bench directed the DVAC to place all documents related to its preliminary inquiry on record before the court. The state government was also asked to file its formal response within one week. Along with that, records relating to tender awards and all documents tied to the preliminary inquiry must be produced. The matter has been adjourned for a further hearing.
The CBI’s involvement if formally confirmed would mark a significant escalation in what has been a slow-moving and heavily scrutinised case. Opposition parties and civil society groups have long demanded a central agency probe, arguing that a state-level investigation cannot be impartial given the political dimensions of the case.
