On December 2, the Supreme Court of India took note of a submission by advocate Prashant Bhushan, who argued that the Arunachal Pradesh government had failed to provide complete and adequate information regarding corruption allegations against Chief Minister Pema Khandu. The Court directed the state government to file a comprehensive affidavit within eight weeks, covering all districts mentioned in the allegations—including Tawang, which borders China. The allegations relate to the period from 2015 to 2025.
The central charge against Pema Khandu—Chief Minister of Arunachal Pradesh and a prominent BJP leader—is that he and his family have run a corruption network that channelled more than Rs 380 crore through government contracts. The allegations centre on four companies owned by members of Khandu’s family, largely from a single district. They point to a pattern of favouritism, rigged tenders and irregular documentation that allegedly intensified after he assumed office.
The scale is striking. In Tawang district alone, state affidavits and audit material indicate that four firms linked to his wife, son and relatives received contracts worth several crores over a little more than a decade. Notably, 59 contracts—worth more than Rs 17 crore—were awarded without competitive bidding. And this is just one of 28 districts, raising concerns about how widespread these practices may be.
The Four Pillars of the Family Business
Brand Eagles: The Flagship Operation
Brand Eagles, owned by Khandu’s wife Tsering Dolma, emerged as the biggest beneficiary, securing contracts worth about Rs 190.65 crore over 11 years. Its dominance raises serious questions about the openness of the bidding process. In one water-supply project in Tawang town, parts of the work were awarded to Brand Eagles at rates higher than the government’s own cost estimates—an unusual situation where the department accepted a bid exceeding its internal benchmark.
In a Tawang road project reportedly awarded through competitive bidding, Brand Eagles received work worth Rs 3.89 crore. However, key documents from the bidding process are missing. Audit findings note that comparative bid statements—essential for evaluating competition—are absent in several cases, suggesting that genuine competition may have been bypassed.
RD Construction and Frontier Associates
RD Construction, linked to Khandu’s son Tashi Khandu, secured contracts worth Rs 30.08 crore, while Frontier Associates, also associated with his wife, received about Rs 21.78 crore. Along with Brand Eagles, these firms were awarded 23 flood-restoration contracts worth roughly Rs 2.38 crore without any competitive bidding.
The Department of Relief and Rehabilitation claimed these works were small and meant to generate local employment, and could therefore be awarded without tenders. However, auditors flagged this as a clear deviation from procurement norms and part of a broader pattern of favouring family-owned firms.
Alliance Trading Company: The Extended Network
Alliance Trading Company—owned by Nima Drema, the wife of Khandu’s nephew and former BJP MLA Tsering Tashi—received the second-largest share of business, with contracts worth about Rs 158.24 crore over 13 years. This shows that the network of beneficiaries extended beyond the immediate family to the wider Khandu clan.
One major road project awarded to Alliance Trading in 2006, worth about Rs 24.76 crore, was flagged because crucial tender documents such as comparative bid statements were missing from records. Their absence undermines any claim of transparency.
Phantom Infrastructure: Roads That Do Not Exist
Some of the most disturbing findings concern projects that appear to exist only on paper. A CAG field inspection found that a porter track between Jang and Sulungthi—allegedly improved at a cost of Rs 2.55 crore between 2002 and 2004—could not be traced. The area was covered in thick vegetation, with no evidence of the claimed work.
Invoices were found only for Rs 1.46 crore of the sanctioned amount, leaving the remainder unaccounted for. In another Tawang road project between Lhou and Mukto, undertaken at a cost of Rs 17.56 crore, officials could not produce invoices for about Rs 12.24 crore—almost 70 percent of the project cost.
The CAG also noted that tender notices were not issued for several high-value road works in Tawang township, with missing bid records and incomplete invoices leaving large sums unaccounted for.
CAMPA Fund Allegations
Civil society groups have also alleged misuse of the Compensatory Afforestation Fund Management and Planning Authority (CAMPA) funds when Khandu oversaw the forest portfolio. The All Nyishi Youth Association (ANYA) claimed that Rs 188.4 crore sanctioned in March 2021 was spent without proper implementation of afforestation work, and alleged irregularities totalling about Rs 400 crore.
The association alleged that money was siphoned off through fake bills involving officials and political figures. While these remain allegations, they deepen concerns about financial mismanagement.
Cooperative Societies and Missing Interest
Audit material also points to cooperative societies and cultural bodies headed by Khandu that received substantial public funds. One society he chaired received Rs 3 crore in 2003 for the promotion of Bodhi language and literature. Later audits found that while the principal remained in a fixed deposit, there were no records explaining how about Rs 3.7 crore in interest had been used, and the society’s registration had lapsed.
These unexplained funds raise questions about whether resources meant for cultural projects were diverted elsewhere. Petitioners have linked some of these issues to the Khandu family, though investigations are still ongoing.
The Father’s Foundation: Dorjee Khandu’s Legacy
The present controversy builds on a longer history of allegations. Pema Khandu’s father, Dorjee Khandu—Chief Minister from 2007 until his death in 2011—was accused of illegally appointing about 14 district rehabilitation officers, 16 assistant mineral development officers and other staff during his tenure as Mines and Minerals Minister, first as contract employees and later regularising them.
After his death, Pema Khandu inherited political capital and control of key departments, which critics say allowed the family to become deeply embedded in the bureaucracy and procurement networks.
The Legal Loophole: Legislating Favouritism
In 2020, the Khandu government amended the Arunachal Pradesh District Based Entrepreneurs and Professionals Act, 2015. The amendment allowed works below Rs 50 lakh to be awarded without competitive bidding for projects that supposedly required no specialised expertise.
The law, however, did not define what constituted “special technical know-how,” leaving a vast grey area in which discretion could flourish. Critics say this effectively legalised no-bid contracts and institutionalised a system already flagged for irregularities.
A Supreme Court Indictment Without Precedent
On December 1, 2025, a bench of Justices Vikram Nath and Sandeep Mehta scrutinised data on contracts awarded to the Chief Minister’s relatives—some won by margins as small as 0.01 percent.
Justice Mehta remarked that such minuscule differences indicate cartelisation rather than genuine competition. The bench noted that many tenders involved only two bidders—one being a family-linked firm that just undercut the other—suggesting pre-arranged sharing of contracts.
The Court made it clear it would not allow the state to confine the issue to Tawang alone. It hinted strongly that attempts may have been made to conceal a larger pattern, and suggested that genuine competition may have been discouraged.
The “Trusted Companies” Defence
During hearings, the state argued that contracts could legitimately go to companies “trusted” by local people—and that firms linked to the Chief Minister were among the trusted ones in his home region. Petitioners dismissed this as absurd, noting that it effectively justified a monopoly by the CM’s family.
The Court rejected this argument, especially in the face of missing documents, no-bid work orders, and suspiciously tight bid margins.
Government Response and the Centre’s Position
Two NGOs—Save Mon Region Federation and Voluntary Arunachal Sena—filed the PIL in January 2024, seeking a CBI or SIT probe into contracts awarded to Khandu-linked firms. In March 2025, the Supreme Court demanded clarity from both the state and the Centre on who received contracts and on what basis.
The Union government responded that procurement in states is governed by state law and that the Code of Conduct for Ministers does not automatically trigger central oversight. This limited the Centre’s immediate intervention, even though some funds may have originated from central schemes.
Beyond Tawang: The Road Ahead
So far, the data before the Supreme Court covers only Tawang. Petitioners have cited at least 31 more contracts worth Rs 188 crore, plus additional work orders worth Rs 2.61 crore, awarded to Khandu’s immediate family.
The Court has now ordered the state to file a district-wise affidavit detailing all contracts awarded between 2015 and 2025 to firms linked to the Khandu family across all 28 districts. The matter will resume in early February 2026. The bench has refrained from ordering a CBI probe for now, but its future course will depend on how credible and complete the state’s disclosures are.
What comes next may determine whether this case remains an audit-led controversy or develops into a full-fledged criminal investigation.
Khandu’s Defence & the Debate on Dynastic Capture
Pema Khandu has consistently denied wrongdoing, noting that no law prevents relatives of constitutional office-holders from engaging in business with the government. While technically correct, critics argue that the issue lies in the pattern of preferential awards, opaque procedures, missing documentation, and projects that do not appear to exist on the ground.
This case raises broader concerns about dynastic politics and institutional capture. The continuity between allegations against Dorjee Khandu and the current charges suggests that long-term political dominance allows families to reshape laws, bureaucracies, and procurement systems to benefit their networks. The Supreme Court’s unusually strong language and insistence on statewide data show that it views this case as symptomatic of deeper governance failures.
