CBI registers fresh FIR in Rs 397-crore Tangedco transformer ‘scam’
Former officials and contractors face probe for cartelised bidding and inflated rates between 2021 and 2023, with losses pegged at Rs 397 crore
The Central Bureau of Investigation’s Anti-Corruption Bureau (CBI-ACB), Chennai, has registered a fresh FIR against former officials of the Tamil Nadu Generation and Distribution Corporation Ltd (Tangedco) and private contractors.
They are accused of criminal conspiracy, cheating, and abuse of official position in the procurement of distribution transformers between 2021 and 2023 when V Senthil Balaji served as the state’s power minister. The Supreme Court upheld the order, refusing to interfere with the CBI investigation.
The allegations
The case, registered on June 6, invokes Sections 120B (criminal conspiracy) and 420 (cheating) of the Indian Penal Code and Section 7 of the Prevention of Corruption Act, 1988 (as amended in 2018). It stems directly from a directive by the Madras High Court dated April 29, 2026, which ordered the CBI to conduct a fresh investigation into multiple public complaints alleging large-scale corruption in Tangedco’s tender process.
Also read: SC upholds CBI probe in ‘transformer tender anomalies’ during Senthil Balaji’s tenure
According to the FIR, tenders were floated by Tangedco for the supply of distribution transformers ranging from 25 KVA to 500 KVA capacity during 2021, 2022 and 2023. The probe will examine how officials from the Tender Inviting Authority and the Tender Scrutiny Committee at Tangedco’s headquarters on Anna Salai, Chennai, allegedly manipulated the process, resulting in “unjust enrichment” for selected bidders and a massive loss of Rs 397 crore to the Tamil Nadu government exchequer.
The accused
The FIR names the following as accused:
Then officials of the Tender Inviting Authority, Tangedco Then officials of the Tender Scrutiny Committee, Tangedco Other public servants Private persons/contractors involved in the bids
No specific individuals have been named at this stage; the investigation is expected to identify the exact officials and beneficiaries.
The complainant
The FIR was registered based on complaints filed by Arappor Iyakkam, a prominent Tamil Nadu-based anti-corruption movement, represented by its managing trustee, Shri Jayaram Venkatesan.
In a complaint, Arappor Iyakkam alleged that 10 tenders valued at approximately Rs 1,182 crore for the supply of over 45,800 distribution transformers of various capacities (25 KVA to 500 KVA). Arappor alleged large-scale cartelisation, collusive bidding, and purchase at inflated rates, resulting in a massive loss to the state exchequer.
Also read: Adani supplied low-quality coal to Tamil Nadu’s Tangedco at high cost
According to the complaint and court records, multiple companies submitted identical bids down to the last rupee in several tenders, a classic sign of cartel formation. For instance, in one tender for 500 KVA transformers, 26 firms quoted exactly Rs 13,72,930 per unit. For 200 KVA units, around 30 companies bid the same price of Rs 7,07,823.
Similar patterns were observed across other capacities, with 25 to 37 firms quoting identical amounts in many cases.
Overpricing in seven tenders
Tangedco allegedly ignored these red flags, declared all bidders as L1 (lowest bidder) without cancelling the tenders, and awarded contracts. The procurement prices were significantly higher than market rates, GeM portal prices, and those paid by other states. One example cited: Tangedco purchased 500 KVA transformers at around Rs 12.49 lakh each, while the tender estimate was Rs 7.89 lakh and Rajasthan procured similar units at much lower rates.
The NGO claimed that in seven key tenders, this collusion and overpricing resulted in unjust enrichment for suppliers and a direct loss of Rs 397 crore to the public. The petition named former minister V Senthil Balaji, former Tangedco chairman and managing director Rajesh Lakhoni, and then financial controller (purchase) V Kasi, among others. Arappor alleged that officials and suppliers acted in concert to rig the process.
Official suspended
In a recent press meet, former minister Senthil Balaji maintained that the purchases involved higher-quality copper-wound transformers with longer warranties compared to aluminium units procured elsewhere. He attributed price differences to market fluctuations, transportation costs, and specifications. Officials also noted that identical bidding occurred in past tenders over the years.
Also read: TANGEDCO cancels Adani-related tender for smart power meters
In a swift move, the TVK government has suspended V Kasi, citing administrative interference and irregularities in tender approvals. Kasi’s name surfaced in the Rs 397-crore transformer procurement scam currently under CBI probe.
Tangedco is the state-owned electricity distribution utility of Tamil Nadu responsible for power procurement, transmission and supply across the state. Distribution transformers are critical equipment that step down high-voltage electricity for safe domestic and commercial use.
