Brewing trouble for the DMK Premium

Tamil Nadu's ruling DMK faces ED scrutiny over alleged ₹1,000 crore liquor scam, sparking political tensions and legal battles.

A few months ago, a real estate broker took the owner of a small parcel of land on the outskirts of Chennai to meet a resourceful senior Minister in Tamil Nadu, hoping to strike a deal. The asking price was around ₹50 crore — well within the Minister’s presumed financial capacity. But the deal never took off.

“People from above are watching closely. If I enter into any deal, they will pounce on me in no time,” the Minister reportedly said. The “people from above” was a clear reference to Central enforcement agencies such as the Income Tax Department and the Enforcement Directorate (ED).

This atmosphere of heightened caution — fuelled by fears of ED scrutiny — is only likely to intensify among ruling DMK politicians, especially in the wake of the agency’s recent searches and questioning related to what it has described as a ₹1,000 crore liquor scam. The spotlight has fallen on the Tamil Nadu State Marketing Corporation (TASMAC), the state-run liquor monopoly and a major revenue generator, rattling the M.K. Stalin-led government.

The government’s response has only underlined its unease. It first rushed to the Madras High Court in March to stall the initial round of ED searches, and later moved the Supreme Court seeking to transfer the writ petitions to another High Court. Both attempts proved unsuccessful. Last month, the Madras High Court dismissed a batch of three petitions filed by the government and TASMAC, refusing to declare the ED’s search and seizure operation at TASMAC’s Chennai headquarters between March 6 and 8 as illegal.

The ED has registered a case under the Prevention of Money Laundering Act, 2002, based on 41 First Information Reports (FIRs) filed by the Directorate of Vigilance and Anti-Corruption under the Prevention of Corruption Act, 1988. These FIRs, dating from 2017 to 2024, allege various irregularities within TASMAC: unaccounted cash recovered from retail outlets and district offices, overpricing of liquor, bribes for transfers and appointments, and corrupt dealings between TASMAC officials and distilleries.

Last week, the ED resumed its investigation, expanding its focus to include two wealthy private individuals reportedly close to the top echelons of power. These individuals are suspected of acting as conduits for laundering unaccounted money linked to TASMAC. In a cinematic twist, one of them reportedly managed to flee just minutes before ED officials arrived at his upscale apartment, boarding a flight to West Asia. Besides, TASMAC Managing Director S. Visakan was taken in for questioning and grilled for over two days. His statements were officially recorded. The direction of the case may well hinge on his disclosures.

Meanwhile, the Opposition AIADMK has seized on printouts of purported mobile chat messages allegedly discarded near Mr. Visakan’s residence on the day of the ED’s visit. One such message, addressed to an unnamed “brother,” discusses details of the TASMAC tender process, points to the involvement of DMK functionaries, refers to internal party dynamics, and acknowledges the existence of illegal bars that “bring a bad name to TASMAC and the government.”