The Enforcement Directorate, a central agency, conducted raids for five continuous days from March 6 across the state-owned Tamil Nadu State Marketing Corporation (TASMAC) offices, distilleries and breweries to investigate into purported irregularities in the liquor trade in the state.

The ED has uncovered a liquor scam involving the Excise and Prohibition Minister V. Senthil Balaji and other senior leaders of the ruling DMK party. The ED is alleging that distilleries across the state were inflating expenses and fabricating purchases, particularly through bottle-manufacturing companies, to siphon off around ₹1000 crore into untraceable funds and shell companies.

Balaji termed the allegations false and stated, “I will face this legally. The specific FIR details mentioned in the ED statement are missing. There are no irregularities. They are creating an image as if there are irregularities.”

The ruling DMK government has termed the raids as ‘political vendetta’. The Tamil Nadu Deputy Chief Minister, Udhayanidhi Stalin told media persons that Tamil Nadu has been consistent in raising its voice against the three-language policy, (skewed) devolution of finance and delimitation (based on current population). “Hence the Union government might be using raids by its agencies as a diversionary tactic. They might tell something after the completion of the raids. Let’s wait.”

The ED conducted raids at the distilleries and breweries in Chennai and Coimbatore, at the residence and offices of friends of Excise and Prohibition Minister V. Senthil Balaji at Karur, at the head office of TASMAC at Egmore in Chennai, regional offices and residences of TASMAC managing director S. Visakan IAS, and few other top officials linked to TASMAC.

4,829 outlets

The ED has asked the TASMAC district officers across to gather and collate data about bar licences, purchase and sales indents, licences of breweries and distilleries and other financial records of all the 4,829 TASMAC retail outlets in the state, to be submitted to the ED through the TASMAC managing director’s office.

Last year, the report of the Comptroller and Auditor General (CAG) which was tabled in the Tamil Nadu Assembly, had revealed that outlets of TASMAC did not pay the differential excise duty of close to ₹30.5 crore due to the revision of rates of Indian Made Foreign liquor, even as the MRPs were revised. It also flagged several other issues like cash-based billing, over-charging and lapses in e-procurement system etc. The TASMAC fetches ₹44,000 crore as annual revenue for the government.

According to media reports at least 41 FIRs resisted by the Directorate of Vigilance and Anti-Corruption (DVAC) against the discrepancies in purchase and sales in TASMAC, in the past 15 years, were taken as the basis for the investigation by the ED officials. The investigation was also looking into the bar licences issued through a tender process across the state in 2023. The ED enquired about the details with regard to the selection process for giving out bar licences, details of the bar owners across Tamil Nadu, their political affiliations, MRP violations, bar procedures, liquor procurement, and information on breweries, distilleries, and FL2 (Recreation Clubs) and FL3 (Star hotels) licensees, including their addresses.

The media reports mentioned that raids were also conducted at Kongu Mess, Sakthi Mess and at the residences of the owners of these outlets; but these did not yield any results. The owners of these two restaurants in Karur are said to be friends of Minister Senthil Balaji and have been under the ED scanner for quite some time.

A team of around 35 officers from Kerala, Delhi and Andhra Pradesh conducted the searches simultaneously to assess the financial irregularities in TASMAC. However, DMK sources say that the raids did not yield anything as expected by the agency, and this was a prelude to the upcoming raids and searches in the run up to the 2026 elections. The raids, sources say, were targetted at Balaji who is already on bail in the cash-for-job scam case.