The Andhra Pradesh CID has alleged that former Chief Minister, present Leader of Opposition leader and Telugu Desam Party (TDP) chief N Chandrababu Naidu is the “chief architect and conspirator of the offence” in the alleged Skill Development Corporation scam case, in its remand report submitted to the Anti-Corruption Bureau (ACB) Court in Vijayawada on Sunday, September 10. However, Naidu is arraigned as A37 (the 37th accused person) in the case. Naidu was arrested by the CID in the early hours of Saturday for his alleged involvement in the Andhra Pradesh Skill Development Corporation (APSDC) scam, which allegedly took place between 2014 and 2018 when the TDP was in power. After hearing arguments for over six hours on Sunday, the court remanded Naidu to 14-day judicial custody.
According to the CID’s remand report, Naidu was the “principal architect” of the APSDC scheme and was involved in misappropriation of funds, framing incorrect documents, using forged documents, causing disappearance of evidence, abetment, as well as abusing his position as a public servant. The CID alleged that Chandrababu Naidu, his family and the TDP were the end beneficiaries of misappropriated funds worth around Rs 279 crore that were diverted to shell companies.
The Deputy Superintendent of Police of the CID’s Economic Offences Wing (EOW) M Dhanunjayudu had asked the court to grant 15 days judicial custody for Naidu. He stated that in order to verify the vast amount of documents from shell companies, including bank accounts, it was necessary to look at additional official witnesses and ascertain the specifics of Naidu’s other transactions. He added that custodial examination was necessary to track the fraud amounting to at least Rs 279 crore through shell companies, prevent evidence from being lost or tampered with, or witnesses being threatened.
Naidu’s alleged role in the scam
On March 11, 2015, Chandrababu Naidu, who was the then Chief Minister, had stated in the AP Assembly that Design Tech and Siemens, two technology partners, were willing to contribute about 90% of the APSDC project cost, or roughly Rs 2,500 crore. The project involved the establishment of six skill development clusters in AP at a cost of Rs 546.84 crore for each cluster, to train youth with employable skills. While 90% of the grant money was expected to come from Design Tech and Siemens, 10% would come from the government over a two-year period, based on the progress of the project.
Former TDP minister Ghanta Srinivas Rao and others worked to create the cost estimate for the project under Naidu’s direction. The CID’s report says that this estimate was made without a sound basis, without any supporting bills or quotes or a thorough project report. On February 15, 2015, it was presented as a draft resolution, the day before a cabinet meeting. The project was approved as a special item in that meeting by Naidu and Atchannaidu, a TDP politburo member.
The CID report alleges that, in what appears to be in Naidu and Atchannaidu’s best interests, this approval was given without verifying the cost estimates, carrying out third-party evaluations or assessments, or adhering to the proper tender process.
On November 4, 2016, when verifying the project, Chandrababu Naidu purposefully didn’t demand the 90% contribution from the technology partners nor confirmed how much they contributed, CID alleged.
How the scam was allegedly carried out
An FIR dated December 9, 2021 registered by the CID alleged that former APSDC employees, including former CEO and MD Ghanta Subbarao, former Director Dr K Lakshmi Narayana and others, had engaged in dishonest and fraudulent behaviour while working for the government. They violated the terms of Government Order Ms No 4 (dated June 30, 2015) and conspired with Vikas Vinayak Khanvelkar, MD of Design Tech, Pune, and Soumyadri Shekar Bose (also known as Suman Bose) of Siemens Industry Software (India) Pvt Ltd., New Delhi, to misappropriate Rs 279 crore out of a total of Rs 371 crore allocated for the Siemens project, the FIR said.
In order to accomplish this, they used fake invoices to transfer APSDC funds to a number of shell companies, including PVSP IT Skills/Skillar Enterprises Pvt Ltd., Allied Computers International (Asia) Ltd., and others, without providing the services promised, it said. These shell companies continued to siphon off funds through other connected entities, misappropriating a total of Rs 279 crore and causing the government to suffer substantial losses.
According to the CID, seven of initial 26 accused have been arrested – Ghanta Subba Rao (A1), Soumyadri Sekhar Bose (A6), Vikas Vinayak Khanwelkar (A8), Mukul Chandra Agarwal (A10), Sirish Chandrakanth Shah, Vipin Sharma (A25), Neelam Sharma (A28) while GVS Bhaskar, a former employee of Siemens, was arrested in March this year. During the course of the investigation, 141 witnesses were interrogated and statements were recorded. Through a memo issued on September 8, the CID added Naidu as A37.
Sirish Shah was the mastermind behind the transfer of the government’s Rs 371 crore stake to the fake ‘Skiller Enterprises’ through Design Tech Systems. Shah created the shell company ‘Allied Computers International’, which won the bid to supply the necessary hardware and software which received a transfer from Skiller Enterprises worth about Rs 242 crore.
The CID emphasised that a system existed for generating bribes for Chandrababu Naidu, from the various work contracts issued by the Government of Andhra Pradesh in the period 2017-2019. “There was a modus operandi of generation of cash through bogus invoices for procurement of works, goods and services by the subcontractors of the main contractors executing the work. The cash was handed over to the persons and at the places as directed by Nara Chandrababu Naidu, by the representatives of the companies executing the works,” the CID stated in the remand report.
The investigation agency named two accused – Yogesh Gupta (A22) and Manoj Vasudev Paradasany (referred as MVP) representing Shapoorji Pallonji, L&T, (SPCL), etc – as involved in generating cash from the funds drawn from the public exchequer, through fake invoices. It is to be noted that MVP, in a recent IT court notice sent to Naidu regarding undisclosed income of Rs 118 cr, has admitted to arranging bogus contacts and work orders for siphoning off of funds from SPCL to generate cash through fake sub-contractor companies.
The CID alleged that the cash was handed over to Pendyala Srinivas, an employee of the government of Andhra Pradesh, who was working as Personal Secretary to Naidu, the then Chief Minister and Kilaru Rajesh, a close associate of Naidu and his son Nara Lokesh.
Investigation revealed that Chandrababu Naidu, his family members, and the TDP were the end beneficiaries for the money thus misappropriated. However, getting the certified copies of the evidence material is pending, CID said.
Additionally, the investigating agency said that though notices were sent to Manoj Vasudev Paradasany and Pendyala Srinivas on September 5 requesting them to join the investigation, they fled to the UAE to shield Naidu. CID also alleged that Naidu facilitated their absconding to disrupt the investigation.