After similar scandals in Delhi, Chhattisgarh, and Jharkhand, a new liquor scam has emerged in Tamil Nadu. The Enforcement Directorate (ED) has reportedly uncovered a network involving DMK Minister V. Senthil Balaji and other senior ruling-party leaders. Balaji, who manages the Electricity, Prohibition, and Excise departments, is under investigation as ED raids expose alleged collusion between officials, politicians and distillery owners. Distilleries across Tamil Nadu are accused of inflating expenses and fabricating purchases, mainly through bottle-making companies, diverting around ₹1,000 crore into unaccounted funds and shell companies. These illegal funds were allegedly used to pay kickbacks in exchange for inflated supply contracts from Tamil Nadu State Marketing Corporation Limited (TASMAC).

Balaji stated, “I will face this legally. The specific FIR details mentioned in the ED statement are missing. There are no irregularities. They are creating an image as if there are irregularities."

 A central agency's investigation led to multiple raids on state-owned entities, including TASMAC and related premises, uncovering an alleged illicit network involving politicians, including cabinet ministers, bureaucrats, and businessmen. The scam closely resembles a similar case in Chhattisgarh.

In its statement, the Enforcement Directorate (ED) revealed that “during the search action in the offices of TASMAC, incriminating data related to transfer postings, transport tender, bar licence tender, indent orders favouring a few distillery companies, the excess charge of Rs 10-30 per bottle by the TASMAC outlets involving the officials of TASMAC, among other evidence, have been recovered." Further findings suggest significant manipulation in allocating bar licence tenders, with contracts awarded to applicants lacking crucial documentation such as GST/PAN numbers and proper KYC details. Communications have also surfaced, revealing direct dealings between distillery companies and senior TASMAC officials, indicating efforts to secure inflated indent orders and obtain undue advantages.

“A glaring issue is the mismatch between the KYC details of the applicant and the Demand Draft (DD), suggesting that the final successful bidder did not even obtain the requisite DD before the application deadline. Additionally, tenders were awarded despite having only a single applicant in the final bid. TASMAC paid over Rs 100 crore annually to transporters," according to the statement.

According to sources in the Enforcement Directorate (ED), investigations have exposed a large-scale financial fraud involving distillery companies, such as SNJ, Kals, Accord, SAIFL, and Shiva Distillery, along with bottling firms like Devi Bottles, Crystal Bottles, and GLR Holding. This organised scheme facilitated the creation of unaccounted cash and illegal payments. Distilleries inflated expenses and fabricated fake purchases, mainly through bottle-making companies, laundering over ₹1,000 crore in undisclosed funds. These illicit funds were then used to pay kickbacks in exchange for inflated supply orders from TASMAC. Bottling companies played a crucial role by inflating sales figures, allowing distilleries to route excess payments. The withdrawn cash was then distributed after deducting commissions. The collision between distilleries and bottling firms involved manipulating financial records, concealing cash flows and systematically evading regulations.

A senior ED official stated that the investigation is now concentrating on the role of TASMAC employees, distillery and bottling sector associates, and other key figures involved in the large-scale fraud. He further revealed that the findings expose a deliberate scheme to generate unaccounted cash, which was used to gather huge profits and gain unfair advantages in the tender and supply processes.