ED ‘unravels’ Rs 1,000-crore liquor scam in TN, confirms The Federal story

The Directorate of Enforcement (ED) in Chennai on Thursday (March 13) formally announced how it has unravelled a black money scheme amounting to ₹1,000 crore, implicating high-ranking officials of the Tamil Nadu State Marketing Corporation Limited (Tasmac), distilleries, and bottling firms. The Federal first reported on the story in its March 8 edition, outlining how ED's raids across Tamil Nadu led to a scam.

The ED, in its press note, said, "Following extensive search operations conducted on March 6, 2025, across various districts in Tamil Nadu under the Prevention of Money Laundering Act (PMLA), 2002, it has found evidence of extensive corruption and financial misconduct associated with the state-operated liquor monopoly.''

Raids expose widespread corruption

The ED initiated its inquiry based on several First Information Reports (FIRs) lodged under the Prevention of Corruption Act, 1988, by the Directorate of Vigilance and Anti-Corruption (DVAC), which raised concerns regarding irregularities in Tasmac operations. The FIRs identified three primary issues: Tasmac outlets charging customers above the Maximum Retail Price (MRP), distillery firms providing kickbacks to secure supply contracts, and senior Tasmac officials soliciting bribes from retail establishments and personnel for advantageous transfers and postings.

Investigations at Tasmac offices, ED confirmed, as reported by The Federal, that it has revealed alleged damning evidence, including documentation of tampered transport and bar license tenders, favoritism towards specific distilleries, and overpricing of ₹10-30 per bottle at Tasmac stores. The ED allegedly retrieved data indicating that transport tenders, which cost the body over ₹100 crore annually, were manipulated — successful bidders frequently lacked adequate documentation, and some tenders were awarded with only one applicant. Likewise, bar license tenders were granted to applicants without GST or PAN numbers, highlighting manipulation.

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Distilleries, bottling companies also involved

The investigation has also focused on prominent distilleries, including SNJ, Kals, Accord, SAIFL, Shiva Distillery, and bottling companies such as Devi Bottles, Crystal Bottles, and GLR Holding. The ED allegedly found indications of a "well-coordinated scheme" aimed at generating unreported cash exceeding ₹1,000 crore. The ED's allegations suggest that distilleries inflated their expenses and fabricated purchases, particularly through their associated bottling firms, to misappropriate funds. These illicit proceeds were allegedly funneled as kickbacks to Tasmac officials to secure larger supply orders.

Sales figures inflated

Bottling companies were instrumental in this scheme by artificially inflating sales figures, which allowed distilleries to process excess payments that were later withdrawn in cash after deducting commissions. The ED's statement highlighted that this collusion was based on manipulated financial records, hidden cash flows, and systematic tax evasion, resulting in substantial profits for the parties involved. Direct communications between distilleries executives and senior officials at Tasmac further supported the claims of efforts to obtain improper advantages.

The ED underscored that these findings indicate violations of the Prevention of Corruption Act, 1988, and classify as Proceeds of Crime (POC) under the Prevention of Money Laundering Act (PMLA), 2002. The agency is currently investigating the involvement of Tasmac employees, associates of the distilleries and bottling companies, and other significant individuals within this illicit network. "The evidence indicates a calculated generation of unaccounted cash through fraudulent expenses, which was then employed for corrupt activities," the ED's statement asserted.

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Political repercussions and ongoing probe

The recent disclosures have incited significant public debate, prompting Opposition parties to leverage these findings to criticise the ruling Dravida Munnetra Kazhagam (DMK) government, which manages Tasmac. The ED's claims of the magnitude of the alleged fraud at ₹1,000 crore highlights widespread corruption within Tamil Nadu’s liquor industry, a crucial revenue stream for the state.

Confirming that its investigation is ongoing, the ED said that “additional inquiries are underway to identify all individuals and entities implicated in this scam”. This also indicates the possibility of forthcoming arrests and further raids in the weeks ahead.

The revelations are a clear signal of how the central agency has intensified its efforts and is out to expose alleged financial misconduct in Tamil Nadu’s liquor sector at a time when the state has crossed swords with the Centre on language, delimitation, and several other Federal issues.