Officials turned off the power connection and put out the spark using fire extinguishers, police said.
As the minor incident triggered anxiety among the gathering at the function got up to commemorate late Chief Minister and AIADMK founder M G Ramachandran's centenary, Palaniswami asserted that nothing will happen.
The comments also seemed to fit the present political situation in the state where Palaniswami is locked in a tussle for power with sidelined AIADMK deputy general secretary TTV Dhinakaran, who is seeking his ouster.
Palaniswami said "nothing will happen" as the 'aatma' (souls) of MGR and his protege Jayalalithaa were with them.
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Incidentally, while addressing the centenary celebrations at Ariyalur last month the Chief Minister had invoked the legacy of MGR and Jayalalithaa and said none can ever separate his government and AIADMK from the people's hearts as long as it was guided by the souls of the two great leaders.
A senior police official told PTI that the spark emanated from a power cable linked to the LED screen which was beaming visuals of the event live and some smoke was also noticed.
To be "doubly sure" fire extinguishers were used to ensure that the spark was put out completely, he added.
On the occasion, the chief minister distributed welfare assistance to various beneficiaries and unveiled 61 new buildings constructed at a cost of Rs 61.07 crore.
At the time of the incident, Lok Sabha Deputy Speaker and senior AIADMK leader M Thamiburai, Deputy Chief Minister O Panneerselvam, state assembly Speaker P Dhanapal and several ministers were present on the dais.