The much-awaited second part of DMK Files was released by Tamil Nadu BJP President K. Annamalai on 26 July 2023.
Earlier in the day, the BJP Tamil Nadu President along with a few members of the party met Tamil Nadu Governor RN Ravi and presented the documents detailing the alleged instances of corruption by DMK leaders and their benamis.
“We presented a memorandum seeking his excellency’s intervention & suitable action concerning Part 2 of DMK files with documents on Benami connected to the DMK Ministers/MLAs/MPs & the first family & 3 scams for a value of ₹5600 Crores,” Annamalai said.
Today, along with the Senior leaders of @BJP4TamilNadu, we had the opportunity to meet our Hon Governor of TN, Thiru RN Ravi avl.
We presented a memorandum seeking his excellency’s intervention & suitable action concerning Part 2 of DMK files with documents on Benami connected… pic.twitter.com/QJv7DHdkk3
— K.Annamalai (@annamalai_k) July 26, 2023
Annamalai also released a 16 minute video detailing three alleged scams which includes ₹3000 Crore ETL Infrastructure Services Limited Scam, ₹2000 Transport Department Scam and ₹600 Crore Scam in Tamil Nadu Medical Service Corporation.
1. 3000 Crore Scam – ETL Infrastructure Services Limited
2. 2000 Crore Scam in Transport Department
3. 600 Crore Scam in TNMSCWe will elaborate more on this during our Padayatra to our friends in Press & Media.
We demand answers from the corrupt DMK… pic.twitter.com/IM7zvGjrOu
— K.Annamalai (@annamalai_k) July 26, 2023
The video begins with the allegation that one family (hinting at Karunanidhi’s family) has accumulated assets worth several crores through corruption.
ETL Infrastructure Services Limited Scam
The Electronics Corporation of Tamil Nadu Limited (ELCOT), a public sector undertaking of the Tamil Nadu Government launched a new subsidiary company called Elnet Technologies Limited (ETL) on 16 July 1990. It was started with a share capital of ₹10 lakhs with 1 lakh shares at ₹10 per share.
“One Thiagarajan Chettiyar is made director of this new company. 1 share is allotted to him which is worth ₹10 only.”, the video says.
In 2004, ETL launches another subsidiary company called ETL Infrastructure Services Limited that focuses on building commercial spaces and IT parks.
“ETL Infrastructure Services Limited has 50,000 shares in total of which 49,000 shares were held by ETL and 1 share by Thiagarajan Chettiyar’s wife Unnamalai Thiagarajan.”, the video presentation says.
On 13 February 2004, Vivek Hariharan IAS is posted as Chairman Director and Unnamalai Thiagarajan as Executive Director.
In July 2004, the authorized capital was subsequently increased from ₹10 crores to ₹25 crores and ₹30 crores in December 2004. By the end of the financial year 2004-05, the authorized share capital was raised to ₹55 crores and ₹100 crores in FY 2005-06.
“10 crore shares worth ₹100 crores at ₹10 per share as authorized share capital gets raised to 120 crore shares worth ₹1200 crores of which 116 crore shares are ordinary shares and 4 crore shares are preference shares.”, the DMK Files 2 video claims.
Many foreign companies also invest in the new entity. In November 2006, IL&FS is allotted shares worth ₹25 crores. ETL Power Services is allotted shares worth ₹184.5 crores in August 2008. Around ₹59 crore worth shares are allotted to 4 entities linked to Thiagarajan Chettiar.
In March 2008, ETL Power Services allots 20,250,000 shares to a Singapore company called Greater India Infrastructures. In the same month, its share capital is raised from ₹25 lakhs to ₹200 crores.
In September 2008, shares of ETL Power Services worth ₹184 crores is bought by the Singapore company which thereby becomes a major shareholder of ETL Power Services.
In February 2010, ETL Infrastructure Services gets renamed as Indian Green Grid Group and subsequently gets changed to IG3 Infra Limited in July 2011. Singapore entity Greater India Infrastructures becomes an important shareholder of this entity.
Now, ETL Power Services which held shares worth ₹184.5 crores in ETL Infrastructure Services is now IG3 Infra Limited.
Unnamalai Thiagarajan who held only one share in ETL Infrastructure Services is the director of Singapore company Greater India Infrastructres which is a major shareholder in IG3 Infra Limited.
Through these complex transactions, the company ETL Infrastructure Services comes under the control of Thiagarajan Chettiar and Unnamalai Thiagarajan.
Aathmika Holdings
This company is said to be a shell company of Thiagarajan Chettiar’s family formed with an investment of ₹1 lakh. However, this company holds 11.23% of the shares in multi-crore company IG3 Infra Limited. The Singapore-company Greater India Infrastructures has transferred all its ETL Power Services shares to Aathmika Holdings.
In November 2020, tax sleuths raid IG3 Infra Limited. As per the income tax authorities, IG3 Infra Limited (previously known as Indian Green Grid Group Limited), a publicly incorporated company established in February 2004 and owning the Chennai One IT Special Economic Zone (SEZ), has been found to conceal foreign income amounting to ₹200 crore. This income, received through share subscriptions, is subject to taxation in India for the shareholders involved.
The search revealed that the group recently obtained five shell companies, which were employed to divert a substantial sum of ₹337 crore from the main group company through the issuance of fraudulent invoices and without conducting any legitimate business through these entities. All the investments were transferred to Aathmika Holdings.
The New Indian Express had reported that the income tax department had initiated proceedings against IG3 Infra Limited under Black Money Act, 2015 for not disclosing foreign assets or beneficial interest in the financial assets schedule of the income tax returns.
ETL which held 99% of the shares in ETL Infrastructure Services in 1990 holds just 0.57% of shares as of today.
It is worth noting that ETL Infrastructure Services was started by a government company ETL. Annamalai’s DMK Files alleges that between 2006 and 2011 when the DMK was in power, the company was fully privatized by Thiagarajan Chettiar and his family who were minor shareholders, through a labyrinth of shell companies.
In 2008, when C. Umashankar IAS who was the head of the ETL then tried to find how a ETL Infrastructure Services, a government company got converted into a private company he was shunted out. He had also tried to find about what happened to the 26 acres of government land whose value today is around ₹3000 crores.
Though the then Opposition leader, the late J. Jayalalithaa raised the issue, the matter saw no progress and eventually died down. She had called the suspension of Umashankar IAS as a case of victimisation for daring to take on the Maran brothers (Dayanidhi Maran and Kalanithi Maran).
It was alleged that IG3 Infra Limited had encroached Pallikaranai marshland and a case pursued in the Madras High Court. The Tamil Nadu Government in its affidavit acknowledges the company to be a private company, saying that it has not encroached any marshland.
The Questions Asked By DMK Files
“During 2006 – 2011, Thiru. MK Stalin was the Industries Minister of Tamil Nadu. How did DMK allow land worth ₹3000 crores which was allotted to ETL Infrastructure Services, go to a private entity?”, Annamalai’s DMK Files video asks.
“What is the mystery wherein Mr. Thiagarajan Chettiar who was a director in Elnet Limited which was started in the year 1988, was instrumental in starting a similar government company of the same name which eventually came under his control?”, the DMK Files video further alleges.
“What is the mystery of him changing his name to Shanmugham Thiagarajan?”, the DMK Files video adds.
“What is the mystery that all of this happened during the erstwhile DMK government?”, the DMK Files video alleges asking what is the Directorate of Vigilance and Anti-Corruption (DVAC) doing about it.
According to Annamalai’s DMK Files video, when details about these were sought from ELCOT through the Right To Information (RTI), they got a response that they are no records available.
The Tamil Nadu BJP has sought a detailed investigation into all the entities which has invested in ETL Infrastructure Services.
Transport Department Scam
APM Group had built a website for the Commissionerate of Transport And Road Safety of the Tamil Nadu Government for registering for vehicle conspicuity and retro fitment.
The DMK Files video alleges that 6 companies, namely – Reflomax, Raatanjey & Co, MNTech, Digicop, Avery, Tracole Techonologies – got recognized as distributors of reflective tapes and rear marking tapes on the same date of application. It claims that only select few companies are being allowed to apply through this portal and recognized as authorized distributors. It is alleged that the APM Group controls and moderates all aspects including those who can use the portal and the details of the registered companies.
According to the DMK Files video, the companies – Raatanjey & Co, Digicop, Tracole Techonologies, Sri Appu Direct Private Limited, and Sai Sukran Ventures Private Limited have no prior experience in reflective tapes and rear marking plates.
The video also shows a pictures of seemingly residential buildings located in different places across Tamil Nadu said to be functioning as offices of the few entities mentioned above.
The DMK Files video further goes on to elaborates on the volume of the total business involved in reflective tapes and rear marking plates.
Total vehicles in Tamil Nadu – 2.5 crores
Number of vehicles required to show fitness certificate in a year – 30 lakhs
Approximate length of reflective tapes required for a vehicle – 33 metres
Approximate total length of reflective tapes required in a year – 33 x 30 lakh = 9.9 crore metres
Approximate cost of a reflective tape – ₹150
Annual revenue from selling reflective tapes – ₹150 x 9.9 crore meteres = ₹1485 crores
Number of heavy duty vehicles – 18 lakhs
Approximate number of rear marking plates required in a year – 18 lakh
Approximate cost of rear marking plates – ₹1500
Annual revenue from selling rear marking plates – ₹1500 x 18 lakh = ₹270 crores
Total revenue = ₹1485 crores + ₹270 crores = ₹1755 crores
The video also mentions the profits made through both the reflective tapes and rear marking plates.
Reflective Tapes
Procurement cost from manufacturers – ₹44
Price at which it is sold to the vehicle owner – ₹150
Net profit – ₹106
Annual profit by selling 9.9 crore metres of reflective tapes – ₹1050 crores
Rear Marking Plates
Procurement cost from manufacturers – ₹240
Price at which it is sold to the vehicle owner – ₹1500
Net profit – ₹1260
Annual profit by selling 9.9 crore metres of reflective tapes – ₹226 crores
Annual net profit – ₹1050 crores + ₹226 crores = ₹1276 crores
The DMK Files video also lists other instances of alleged corruption in procuring different equipments.
Speed control equipment – ₹23.75 crores
Location tracking equipment – ₹150 crores
High security number plate – ₹557.25 crore (non-passenger vehicles) + ₹15 crores (passenger vehicles)
Pollution measuring equipment – ₹15 crore (petrol bunks) + ₹3.6 crore (two wheelers) + ₹95 lakh (4 wheelers)
CCTV camera – ₹18 crores
Total – ₹783.55 crores
It is alleged that Goods and Services Tax (GST) worth several crores have been evaded.
According to the calculations, ₹316 crores is the GST amount that was supposed to be collected for ₹1755 crore revenue generated through reflective tapes and rear marking plates. However, money is collected in cash and routed across Tamil Nadu through hawala transactions to avoid paying GST, the video claims.
There is also an audio clip of an alleged phone conversation between a collection agent and one Louis Kathiravan, a personal secretary of Transport Minister SS Sivasankar. In the audio, the Minister’s personal secretary can be heard demanding bribe money from the collection agent.
The DMK Files video alleges that 30% of the net profit ₹1276 crores earned, amounting to ₹383 crore was supposed to be paid as tax which has been evaded.
“Our allegations is that Transport Minister Sivasankar’s job has been to collect ₹2000 crores annually and give it to Udhayanidhi Stalin.”, the DMK Files video says adding that as a quid pro quo, advertisements of Rose Fertility Clinic run by Minister Sivasankar’s wife SS Gayathri Devi has been allowed to be placed in government buses.
Tamil Nadu Medical Services Corporation Scam
The Tamil Nadu Medical Services Corporation (TNMSC) releases a list of the eligible companies allowed to supply pesticides of which one of them is a company called Paramount Pesticides based in Meerut, Uttar Pradesh which supplies pesticides and other chemicals to various state governments.
In Tamil Nadu certain companies are supplying pesticides to the Tamil Nadu Medical Services Corporation (TNMSC) by claiming to be the agents/distributors of Paramount Pesticides. These companies are – Sri Balaji & Co in Udumalaipettai, Sri Durga Enterprises in Chennai’s Ernavur, Sri Sethu Enterprises in Chennai’s West Mambalam, Sri Vaari Agencies in Chennai’s Anna Nagar, Sri Nadiyambal Agency in Vizhupuram.
Paramount Pesticides had written to the Tamil Nadu government on 15 June 2022 that its letter to the TNMSC dated 14 November 2018 was being misused by a few companies. The Uttar Pradesh-based company clarified that it had entered into no contract with any such companies for the supply of the chemicals. It said that a letter dated 25 August 2021 claiming to enlist authorized entities for the supply of pesticides is a fake one and urged TNMSC to cancel the agreements it signed with the impersonating entities.
In one instance, a letter of Paramount Pesticides having a Chennai address is sent to Assistant Director of Town Panchayat, Coimbatore Zone regarding the supply of pesticides for the next two years referring to the original letter to the TNMSC dated 14 November 2018. It claimed Sri Nadiyambal Agency in Vizhupuram as its authorized entity to supply the pesticides. It is noteworthy to mention that there is already a DVAC case against Sri Nadiyambal Agency
No action has been taken against them, even though Paramount had complained to the government saying that action must be taken against these companies as they are not its agents, Annamalai said. This is said to be causing loss of ₹300 crore per year to the exchequer.
The Big Box
Apart from documents pertaining to the above scams, BJP Tamil Nadu led by Annamalai also submitted documents related to nine ministers and their benamis to the Tamil Nadu Governor, the details of which have not been made public.
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