Arappor Iyakkam points fingers at DMK, BJP in Rs 1,000 crore corruption over TN food-grain transport tenders

CHENNAI: Arappor Iyakkam, an anti-corruption watchdog, has submitted a detailed complaint to multiple investigation agencies, including the CBI, Directorate of Enforcement, Directorate of Vigilance and Anti-Corruption, and the Director General of Income Tax (Investigation), urging them to initiate a probe into a massive corruption scandal in intrastate paddy transportation involving the Christy Friedgram Group.

The complaint centres around alleged illegal dealings and unjust enrichment amounting to a staggering Rs 992 crore, implicating a network of companies—Muruga Enterprises, Kandasamy & Co., and Karthikeya Enterprises—allegedly controlled by TS Kumarasamy of the Christy Friedgram Group.

Speaking to reporters at the Chennai Press Club here on Tuesday, Jayaram Venkatesan, convener of Arappor Iyakkam, claimed that these companies, in collusion with public servants from the Tamil Nadu Food and Civil Supplies department, the Tamil Nadu Civil Supplies Corporation, and the Central Government's Food Corporation of India, were awarded transport tenders for moving paddy and grains across the state at a cost of 107 pc above the market rate.

According to Arappor, this unjust enrichment resulted in a massive financial loss to the state exchequer, amounting to Rs 992 crore.

In its complaint, Arappor accused both the BJP-led Union government and the ruling DMK government in TN of conspiring to award these tenders within a month of the NDA's return to power at Centre in 2024.

The complaint, spanning 40 pages, with additional 565 pages of supporting documents, has been submitted not only to the CBI and other probe agencies but also to key political figures, including Tamil Nadu CM MK Stalin, central and state food ministers, the finance secretary, and various senior bureaucrats.

Jayaram emphasised that the scam has had a negative impact on the public, with ration card holders facing severe shortages of essential goods. He pointed out that because of the scam, ration items are often unavailable to the public unless purchased within the first seven days of any given month.

Arappor had previously exposed a Rs 2,028-crore scam in 2021 involving Christy's procurement of ration items; it is still under investigation.

"In June 2023, a transportation tender was issued for the movement of grains across 38 districts in the state. The tender, which covers the transportation of paddy from procurement centres to storage and then to rice milling and distribution centres, was awarded to Muruga Enterprises, Kandasamy & Co., and Karthikeya Enterprises at Rs 598 per metric tonne—Rs 310 more than the tender's listed price. This inflated pricing results in a loss of approximately Rs 1,000 crore for the government," states Arappor’s complaint.

Cancel paddy transport tender to pvt players: Arappor

Arappor, in its complaint, pointed out, "Until 2020, the transportation of paddy was handled by local lorry owners at a much lower cost of Rs 200-250 per metric tonnes for distances up to 5 km. However, in 2020, the state government awarded a state-level transport tender to Zinc Foods, a subsidiary of the Christy Friedgram Group, at Rs 640 per tonnes for the same distance. Despite the government's cancellation of this tender within three years, the group's involvement in the paddy transportation tender for 2023-25 is now under scrutiny for similar financial malpractices."

Venkatesan demanded that the state government cancel the tender immediately and use the saved funds to ensure ration items are available to the public throughout the month.

He argued that if the corruption were to be addressed, the government could redirect nearly Rs 1,000 crore towards improving access to basic necessities and facilitating better education for children.

In a statement, Arappor condemned both the central and the state governments for their alleged complicity in this corruption, describing their outward political differences as a façade masking their joint participation in the fraudulent activities.

Jayaram further urged the media to intensify public pressure on the government to investigate the issue and hold those responsible accountable.