The Supreme Court on Monday, 11 May 2026, heard appeals filed by Tamil Nadu Generation and Distribution Corporation (Tangedco) and its former Finance Controller V. Kasi against the Madras High Court order directing a Central Bureau of Investigation (CBI) probe into the alleged ₹397-crore transformer procurement scam linked to the tenure of former Electricity Minister V. Senthilbalaji. The matter was listed before Justices Vikram Nath and Sandeep Mehta.
The controversy stems from a 29 April 2026 order of the Madras High Court, which directed the CBI to conduct a de novo investigation into alleged irregularities in transformer procurement between 2021 and 2023. The Division Bench comprising Chief Justice Sushrut Arvind Dharmadhikari and Justice G. Arul Murugan observed that the Tamil Nadu government’s handling of the case created a “reasonable suspicion” of attempts to shield senior officials and political figures.
Anti-corruption organisation Arappor Iyakkam had lodged a complaint on 6 July 2023 against Senthilbalaji, former Tangedco chairman Rajesh Lakhoni, and former Financial Controller (Purchase) V. Kasi, alleging corruption in transformer procurement contracts. The Directorate of Vigilance and Anti-Corruption (DVAC) later sought government approval in January 2024 to conduct a detailed inquiry. However, the High Court noted that permission was granted only in September 2025 and restricted solely to a preliminary inquiry against Kasi.
The Bench criticised the 20-month delay and observed that the DVAC had effectively carried out a full-fledged investigation without registering an FIR. The court pointed out that the agency examined 44 witnesses and 68 documents before filing a 73-page closure report on 4 April 2026 stating that there was insufficient evidence against Kasi. The judges held that such an extensive probe exceeded the scope of a preliminary inquiry and raised concerns about procedural integrity.
The High Court subsequently ordered the DVAC to transfer all case-related records to the CBI within two weeks and directed the State government, Tangedco and the DVAC to cooperate fully with the investigation. At the same time, the Bench clarified that its observations were limited to deciding whether an independent investigation was warranted and should not be treated as findings on the merits of the allegations.
Responding to the High Court order earlier, Senthilbalaji denied any wrongdoing and maintained that the procurement process followed established rules and procedures that had been in practice since 1987. He stated that contracts were awarded to the lowest bidders and quantities were distributed among firms when multiple bidders quoted identical prices. He also alleged that the complaints were politically motivated.
Meanwhile, K. Annamalai questioned why Tangedco had approached the Supreme Court against the CBI probe order. He urged the newly formed TVK government in Tamil Nadu to withdraw the appeals and restore general consent for CBI investigations in the State, which had been withdrawn by the previous DMK government. He also referred to other pending corruption-related complaints awaiting FIR registration by the DVAC.
Why is TANGEDCO, a state-run corporation, filing an appeal in the Honourable Supreme Court against the direction of Honourable Madras High Court to hand over all the relevant files related to the ₹397 Crore Transformer Scam to CBI? Even if the appeal was filed by the previous… https://t.co/I9OAs4JuJn
— K.Annamalai (@annamalai_k) May 11, 2026
Supreme Court Refuses To Halt CBI Probe
The Supreme Court on Monday, 11 May 2026, refused to interfere with the Madras High Court’s order directing a CBI probe into the alleged ₹397-crore transformer procurement scam, as reported LiveLaw. A Bench of Justices Vikram Nath and Sandeep Mehta dismissed the plea filed by a TANGEDCO official challenging the probe. Senior Advocate Siddharth Dave argued that there was no prayer seeking a CBI inquiry before the High Court and called the case politically motivated. The Supreme Court, however, held that courts could order such probes based on circumstances and directed that the investigation proceed independently.
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