On 13th March, the Enforcement Directorate (ED) said that distilleries in Tamil Nadu have embezzled more than ₹1,000 crore in unaccounted cash, which was used as kickbacks to obtain “increased supply orders” from the state-run Tamil Nadu State Marketing Company Limited (TASMAC), which holds the liquor sales monopoly. The amount was stolen in collusion with bottle manufacturing companies through false purchases and exaggerated expenses, as documents uncovered by the agency.
The central agency reported in a press conference that the distillery companies SNJ, Kals, Accord, SAIFL and Shiva, as well as the bottling companies Devi, Crystal and GLR Holding, were involved in the carefully designed fraud. ED searched the TASMAC headquarters, depots, distilleries, and the corresponding corporate offices for four days starting on March 6th at multiple locations in Tamil Nadu.
“Bottling companies such as Devi Bottles, Crystal Bottles and GLR Holding, which supply bottles to distilleries, inflated sales figures, allowing distilleries to route excess payments. These payments were later withdrawn in cash and returned after deducting commissions. The financial records of bottling units were manipulated to conceal cash flows and systematic evasion. Unaccounted cash was deliberately generated through inflated and bogus expenses and subsequently utilised by distilleries for purposes leading to huge profits,” the official statement conveyed.
According to the ED, the role of TASMAC personnel and associates, distilleries, and bottle-making businesses was being investigated. “The role of employees and associates related to TASMAC, distilleries and bottle-making companies, along with other key associates in the illicit affairs related to TASMAC, are being probed,” it outlined.
The agency highlighted that it obtained proof that TASMAC’s transport and bar license tenders were manipulated. “The liquor corporation, which pays 100 crore annually to transporters, awarded the contract even though there was just one firm in the final bid,” the agency unveiled.
The discrepancy between the applicant’s KYC information and the Demand Draft (DD) was an apparent issue, indicating that the successful bidder could not have even received the necessary DD prior to the application deadline. Likewise, bar licenses were granted to those without a PAN or GST number or appropriate KYC documentation. Direct correspondence between distillery businesses and higher-ranking TASMAC officials was documented, revealing attempts to obtain more indent orders and unwarranted favors.
According to the press release, the results created Proceeds of Crime (POC) as defined by the Prevention of Money Laundering Act of 2002 and established a number of offenses under the Prevention of Corruption Act of 1988. Incriminating information on transfer posts, transport tenders, bar license tenders, indent orders that favored a select group of distillery companies and Tasmac outlets charging an excessive fee of ₹10 to ₹30 per bottle was found.
The searches were based on formal complaints filed by the DVAC between 2016 and 2021 regarding offenses, including TASMAC stores collecting more than the MRP, distilleries paying its officials kickbacks for supply orders and its senior officials obtaining bribes from its retail stores and using them to transfer and posting of its staff.
