COIMBATORE: The Directorate of Vigilance and Anti-Corruption (DVAC) booked a criminal case against AIADMK former minister SP Velumani and his associates in connection with a scam of Rs 500 crore in the purchase of LED street lights. The DVAC sleuths are conducting raids in 26 places belonging to SB Velumani and his associates across the state.
The case was filed against Velumani on the allegation that he had abused his official position in awarding tenders injudiciously to his close associated companies causing a loss to the government of approximately Rs 500 crores in replacing the existing street lights with LED lights in rural areas between 2015 and 2018. Along with him, nine more suspects including his associates and the entities who won tenders, were also booked in the case.
"The suspects of this case violated tender guidelines and allotted tenders mostly to the Benami entities of Velumani. On sample verification of five districts, it is found that they caused a loss of Rs 74 crores to the government. The prima-facto reveals that the cause might have been followed in the other districts to swindle the public money and cause loss to the government. The prima facie material reveals that the suspects and other officials involved in the execution of the scheme and contractors conspired together to obtain wrongful gain from the amount allotted for the scheme" said DVAC.
Based on the case, the DVAC on Tuesday began searches of 26 places including 10 in Chennai, 9 in Coimbatore and seven places in Tambaram, Avadi, Tiruchy and Chengalpattu.
The case has been registered against 10 people - former Minister for Rural Development and Panchayat Raj SP Velumani, Managing Director of KCP Engineers Pvt. Ltd. K Chandraprakash, R Chandrasekar, Director of KCP Engineers Pvt. Ltd., D Srinivasan, Managing Director of ACE Tech Machinery Components India Pvt at Vadavalli in Coimbatore, D Siddharthan, Director of ACE Tech Machinery Components India Pvt. Ltd., KU Rajan, Proprietor of CR Construction from Coimbatore, CT Radhakrishnan, Proprietor of Sabari Electricals from Ambattur in Chennai, R Parasuraman, Partner of Murugan Electrical Traders from Chennai, P Vijayakumar, Partner of Orient Poles from Chennai, K Manivarman, Proprietor of RKM Electricals from Chennai.
They were booked under the IPC sections 120 (b), 409, 420 and sections 13 (2) r/w 13 (1) (c) & (d) and 13 (2) r/w 13 (1) (a) Prevention of Corruption Act.
According to the DVAC, they received two petitions on May 20, 2019, and July 15, 2020, from Assembly Speaker M Appavu against SP Velumani to conduct a detailed inquiry on the allegations. It was registered by the investigation agency on October 10, 2021.
In both the above petitions, it was alleged that Velumani hatched a plan to swindle public money in the name of replacing the old street lights with LED lights at the village panchayat level under the guise of reducing electricity consumption and annual maintenance of street lights during the year 2015 to 2018 in a phased manner.
To execute his plan, he made the former Chief Minister announce the scheme of replacing street lights with LED lights on the floor of the Assembly under Rule 110 of Tamil Nadu Legislative Assembly Rules since the members of the Assembly have no right to question or see an explanation of the scheme.
Then Velumani constituted a State Level Committee to fix the cost of LED lights for each financial year and to frame the terms and conditions of tenders. The State Level Committee framed terms and conditions so that Velumani's men get the contract for replacing lights at the district level, said the FIR.
It is alleged that the tenders were offered to the non-experienced bidders and the benamis to Velumani.
"The suppliers of 20W and 90W LED streets lights in the tender are either fake or have no experience in the electrical business. They are nothing but benami entities of SP Velumani. During the financial years, 2015-16, 2016-17 and 2017-18, SP Velumani, his administrative officers and state-level committee members fixed a very high rate for the LED lights than the original market rate in the scheme of replacing the existing street lights with LED lights and caused loss to the government around Rs 500 crores in the Rural Development and Panchayat Raj department", the FIR reads.
Further, it reads, that two more announcements were made in the assembly during the financial year 2016-17 and 2017-18 for replacing existing tube lights and Mercury vapour, Sodium vapour, balance tube lights with LED lights respectively and GOs were issued for allotting fund and issuing guidelines. As per the announcements in total Rs 875,70,06,076 was sanctioned for the implementation of the scheme. During the implementation of the scheme, Velumani had willfully abused his official position in causing injudicious award of the tenders in connivance with the unknown officials of the District Level Committee of members thereby causing undue pecuniary advantage to the alleged companies/firms, according to the FIR.
While comparing the market rate with the rate of LED street lights procured through tender it was found that there is a vast difference in the rates. The rate of procured street lights was abnormally higher than the market rate. When comparing the market rate with the procured rate of LED street lights in Salem, Dharmapuri, Tiruchy, Nagapattinam and Kanyakumari districts where Velumani's associates were offered tenders, Rs 74,00,58,700.32 loss to the government was found.
It is the third such search conducted at the places belonging to SP Velumani and his associates. Earlier in August 2021 during the search against Velumani, DVAC made seizures to the tune of Rs 13.8 lakhs raiding 60 locations. Then in March 2022, DVAC booked a disproportionate assets case accusing him of accumulating wealth to the tune of Rs 58.23 crore and seized 11.153 kg of gold jewellery, Rs 84 lakh in cash and details of cryptocurrency to the tune of Rs 34 lakh.