The CBI on Wednesday conducted raids in several locations in Chennai, including the houses of TN Director General of Police TK Rajendran, the ex-DGP S George, Health Minister C Vijayabaskar, former Milk and Dairy Development Minister BV Ramanaa, among others, in relation to the multi-crore gutkha scam. The raids reportedly started at 7.30 am in the morning. Nearly 35 places in Chennai, Thiruvallur, Thoothukudi, Pondicherry, Bengaluru Mumbai and Guntur were searched by the CBI.
Rajendran’s house is located in Mogappair, while S George’s house is in Maduravoyal. Sources said that searches were also held in the houses of officers working in the Food Safety Department, Central Excise Department and the police. Jayam Industries too was searched by the CBI.
The CBI said that they searched the residential premises of the promoters/directors of the company, officials of the sales tax department, Customs and Central Excise officials, Food Safety & Drug Administration Department officials and police officials.
The raids come a year after the scam came to light. In April this year, the Madras High Court ordered that the CBI probe the case. The central investigation body took over the case from the Directorate of Vigilance and Anti-Corruption.
The scam
In July 8, 2017, raids were conducted at the godown, offices and residences of a pan masala and gutkha manufacturer in Tamil Nadu, who was facing charges of evading tax to the tune of Rs 250 crore. The manufacture, storage and sale of the carcinogenic chewable forms of tobacco, including gutkha and pan masala was banned by the state government in 2013.
Seized during the raid was a diary containing names of those who were believed to have been paid off by the gutkha manufacturers– and one among them was allegedly the state's health minister.
Later, documents showed that an amount of Rs 40 crore was allegedly paid to the Minister and several officials as quid pro quo for facilitating the sale of banned gutkha in Chennai.
The letter, written by the Principal Director of Income Tax to the Chief Secretary and Director General of Police, reportedly sought further investigation into the matter. The communication was made in May 2016 back but there was allegedly no action taken in the matter.
Top cops and bureaucrats were named in connection to the scam. This included the state's Director General of Police TK Rajendran, former Chennai Police Commissioner S George, several officials in the department of Health and Food Safety and local councillors among others. The main allegation was the payoffs received by these individuals from gutkha baron Madhava Rao.
The Income Tax department had told the Madras High Court that its report to the former Director General of Police Ashok Kumar on the gutkha scam was found during the raids conducted at Veda Nilayam in November last year.
The letter reportedly detailed corruption involving the Health Minister, top police officers and others in the scam. According to the submission the letter was found in former CM Jayalalithaa’s Poes Garden residence, specifically in her aide VK Sasikala's rooms, leading to questions on how a confidential letter was in her possession.
Despite the ban of gutkha, the business has been thriving in Tamil Nadu. According to reports, around 30,000 traders sell these products in Chennai district alone. There are only 25 officers to monitor them and this includes officials who are allegedly paid a monthly bribe of Rs 35 lakhs by each company. Around 119 tonnes have reportedly been seized since 2013 in Chennai, but the quantity circulating in the market is predicted to be ten times that amount.