Madras High Court Orders CBI Probe in ₹397 Crore Transformer Procurement Case

Chennai– The Madras High Court has ordered a probe by the Central Bureau of Investigation (CBI) into alleged financial irregularities and money laundering worth ₹397 crore linked to the procurement of distribution transformers by the Tamil Nadu Generation and Distribution Corporation (Tangedco).

A bench led by Chief Justice S A Dharmadhikari and Justice G Arul Murugan directed the State Directorate of Vigilance and Anti-Corruption (DVAC), which had been handling the matter so far, to hand over all documents and evidence to the CBI.

The court emphasised that the central agency must carry out the investigation promptly and with seriousness.

The direction came while hearing petitions, including a public interest litigation filed by Chennai-based anti-corruption group Arappor Iyakkam and another plea by AIADMK leader E Saravanan, both seeking an independent inquiry into the matter.

Petitioners alleged that contracts worth over ₹1,182 crore for the purchase of more than 45,000 transformers between 2021 and 2023 were manipulated. According to submissions made in court, several companies allegedly quoted identical prices — even down to decimal points — raising suspicion of cartelisation and pre-arranged bidding.

It was further claimed that, following negotiations, the bidders reduced their prices in a nearly identical pattern, which petitioners argued was highly unlikely in a competitive tendering process. They alleged that transformers were procured at rates significantly higher than prevailing market prices, causing substantial losses to the state exchequer.

The NGO also pointed out delays in action by the DVAC, stating that despite filing a complaint in 2023, no formal case had been registered for an extended period.

The petitions named several officials, including V Senthilbalaji, former Tangedco chairman Rajesh Lakhoni, and finance officials, as being associated with the decision-making process.

During earlier hearings, the court had sought status reports and questioned how such large contracts were cleared despite apparent irregularities in pricing patterns.

The state government, however, has denied all allegations, maintaining that the tenders were conducted as per norms and suggesting that the petitions may have been politically motivated.

With the case now handed over to the CBI, further developments will depend on the findings of the central agency’s investigation.