The Madras High Court on Wednesday directed the Central Bureau of Investigation to probe an alleged loss of Rs 397 crore to the state exchequer linked to irregularities in the procurement of transformers during V Senthil Balaji’s tenure as Tamil Nadu electricity minister, Bar and Bench reported.

The alleged irregularities purportedly took place between 2021 and 2023, when the Dravida Munnetra Kazhagam leader was the state minister.

A First Division Bench of Chief Justice Sushrut Arvind Dharmadhikari and Justice G Arul Murugan was hearing a writ petition filed by non-governmental organisation Arappor Iyakkam and members of other political parties.

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The NGO had approached the Directorate of Vigilance and Anti-Corruption on July 6, 2023, and later moved the High Court seeking directions to the agency to act on its complaint and register a first information report.

On Wednesday, the bench directed the state anti-corruption agency to transfer all relevant material to the CBI within two weeks, and asked the central agency to conduct a fresh investigation into the matter, Bar and Bench.

The alleged scam

The Tamil Nadu Generation and Distribution Corporation procures distribution transformers through competitive bidding based on varying load-capacity requirements.

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Arappor Iyakkam reportedly analysed 10 tenders floated between 2021 and 2023 for the procurement of 4,58,000 distribution transformers, at a value of Rs 1,182 crore.

The NGO alleged that seven of these tenders showed irregularities to favour specific bidders through “collusive bidding and cartelisation”, leading to a loss of Rs 397 crore, The Hindu reported.

Balaji was serving as minister for electricity, prohibition and excise at the time. He was arrested in June 2023 in an unrelated cash-for-jobs case, and continued as a minister without portfolio until his resignation in February 2024.

He also faces allegations of money laundering.