Former Andhra Pradesh Chief Minister and president of Telugu Desam Party N Chandrababu Naidu was arrested by the CID on September 9, Saturday for his alleged involvement in the skill development corporation scam case. Naidu is facing allegations of corruption and "misleading the Cabinet". Police arrived in Nandyal to arrest him in the middle of the night, but were forced to wait till early morning amid protests by TDP cadres. Although the exact allegations related to Naidu's involvement in the scam are yet to be made public, the CID has alleged that he played a major role and is now the prime accused in the case. The arrest memo says that Naidu was being arrested on an FIR registered in 2021 in relation to the scam, however the FIR did not then name Naidu. Police sources say the FIR will be altered.
Government funds worth Rs 371 crore are alleged to have been misappropriated towards private firms and siphoned off using shell companies. Here's what the case is all about.
The allegations date back to 2014 , when the then Telugu Desam Party (TDP) government under Naidu established the Andhra Pradesh Skill Development Corporation (APSDC) to train unemployed youth to make them employable. With an estimated project cost of Rs 3,300 crore, a memorandum of understanding (MoU) was signed by the APSDC and a consortium consisting of the companies Siemens India Software India Ltd and Design Tech Systems Pvt Ltd (DTSPL).
The companies proposed to establish skill development centres across the state, and only 10% of the total project cost was to be covered by the state government, while the remaining 90% was to come in the form of a grant-in-aid by Siemens and Design Tech. The proposal by the two companies was allegedly accepted by the government without proper verification, and funds worth Rs 371 crore were released even before work commenced.
According to the Enforcement Directorate’s investigation into the case, the TDP government violated the AP Civil Works Code and the AP Financial Code by releasing the Rs 371 crore amount even before the project started, and without calling for any tenders. The funds were diverted with the alleged involvement of the former CEO & MD Ghanta Subba Rao, along with then director of the APSDC K Lakshminarayana, according to the ED. The officials allegedly drafted the work order for Rs 371 crore without mentioning the 90% in-kind grant provided to the companies, the agency further alleged.
A large portion of these funds released by APSSDC were allegedly siphoned off and converted into cash by using a chain of shell companies and fake invoices issued by them, according to ED. "DTSPL, its director and others diverted the Government funds with the help of shell entities through multi-layered transactions and siphoned off the funds on the strength of bogus invoices under the pretext of supply of materials/services, " ED had said in April while attaching some properties of DSTPL.
"Part of the diverted funds was received back by DTSPL and its bank accounts. Proceeds of crime in the possession of DTSPL have been traced in the form of fixed deposits. These fixed deposits totaling to Rs 31.20 Crore have been provisionally attached during investigation, " ED had said.
The allegations first came to light when a whistleblower approached the ACB in 2018.
The old FIR registered on December 9, 2021, mentions the names of Ghanta Subba Rao, Dr K Lakshminarayana, Nimmagadda Venkata Krishna, Designs Tech systems, Skiller enterprise 6. Sowmyadri Shekarm Pratap Kumar Kar, K Vikas Vinayak, Sanjay Daga, Mukul Agarwal, Saurabh Garg, Hirji Kanji Patel and Shirish Chandra Kanth as accused in the case.