Madras HC orders CBI probe into Rs 397 Cr transformer tender scam during DMK's Senthil Balaji tenure

The Madras High Court has directed the Central Bureau of Investigation (CBI) to investigate into alleged irregularities leading to Rs 397 crore loss to the Tamil Nadu Government in a transformer procurement tender moved when Senthil Balaji was having the electricity portfolio. The high court also ordered the state's Directorate of Vigilance and Anti-Corruption (DVAC) to relinquish all the significant records to the CBI within two weeks.

The court's decision followed after the case originated from a complaint registered by anti-corruption NGO Arappor Iyakkam, alleging a large-scale conspiracy in the tender process between 2021 and 2023, which resulted in an estimated loss of Rs 397 crore to the state exchequer.

Based on the complaint, the alleged pattern suggests cartel-like behaviour among bidders. As many as 34 firms that took part in the tender reportedly quoted identical rates, which were 40–60 per cent higher than the prevailing market prices for distribution transformers.

The NGO argued that such uniform pricing points to pre-planned bids designed to suppress competition and drive up procurement costs. It further claimed that this coordinated approach led to contracts being awarded at inflated rates, resulting in substantial losses to the government.

Arappor Iyakkam founder Jayaram Venkatesan described the High Court order as a crucial development in the case. "This is the first step towards victory. We had to struggle for almost three years just to get the FIR registered. We hope the corrupt are punished, and the loss of Rs 397 crores is recovered back to the treasury," NDTV quoted Arappor as saying.

The organisation added that it had been following up on the matter for nearly three years, alleging delays before finally obtaining judicial intervention.

Resignation of Senthil Balaji from the minister post

The transformer tender investigation further compounds the legal troubles of Senthil Balaji. He had previously resigned from his ministerial post after the Enforcement Directorate accused him in a money laundering case tied to an alleged cash-for-jobs scam during his tenure as Transport Minister under former Chief Minister J Jayalalithaa.

He was also alleged to have a separate Rs 1,000 crore irregularity in liquor procurement for sale through state-run outlets. However, Balaji denied all allegations, clarifying that he will face the cases legally.

Reacting to the allegations, Balaji refuted claims of any wrongdoing during the transformer tender process and asserted that the same procurement system had been followed since 2016. He stated that three separate committees had examined the bids, and contracts were awarded when participating companies quoted identical prices, arguing that such uniformity should not be viewed as irregular. Senthil Balaji also maintained that the government did not suffer any financial loss.

Meanwhile, the Madras High Court has directed a probe by the Central Bureau of Investigation into an alleged Rs 397 crore loss in a transformer tender in Tamil Nadu. The case, brought forward by Arappor Iyakkam, alleges cartel-like bidding by 34 firms quoting inflated rates.