Andhra ESI scam: Seven held, teams formed to arrest 12 more

Telugu Desam Party (TDP) MLA and former labour minister Kinjarapu Atchanaidu and six others have been arrested so far.
Andhra Anti Corruption Bureau
Andhra Anti Corruption Bureau
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The Andhra Pradesh government's Anti Corruption Bureau (ACB) on Sunday said 12 more people accused in the multi-crore Employees State Insurance (ESI) scam would be arrested in the coming days. The state police have arrested Telugu Desam Party (TDP) MLA and former labour minister Kinjarapu Atchanaidu and six others so far.

"In the ESI scam so far, 19 persons (both public servants and private persons) involvement has been noticed. So far, seven of them have been arrested. The police have formed teams to arrest other accused in the coming days," a senior ACB official told PTI.

The other accused to be arrested are officials of Employees State Insurance (ESI) hospitals, one official working in the state Secretariat and private suppliers.

According to the ACB, during the five years of TDP rule (2014 to 2019) when Atchanaidu was Labour Minister, there were several irregularities in the procurement of medicines, surgical equipment, and furniture worth Rs 988.77 crore for ESI hospitals, ESI diagnostic centres and ESI dispensaries spread across the state.

I procurement of these alone, the accused are alleged to have violated the procedures and guidelines, causing a loss of Rs 155 crore to the state exchequer.

The ACB official said that three then Directors of Insurance Medical Services (DIMS), which implements the ESI scheme in the state, made purchases without constituting a drug procurement committee and without calling for open tenders.

They have been accused of fabricating quotations for the tenders and paying excess amounts without negotiating the rates. The total budget allocation for the purchase of drugs and medicines during the tenure of three directors was Rs 293.51 crore, while purchased drugs and medicines were worth Rs 698.36 crore, the official added.

The ACB official further said some of the staff of the DIMS using their official positions established benami firms in the name of their family members and got purchase orders for the supply of medicines and drugs. Irregularities committed in assigning works of sewerage and biomedical waste disposal plants are under probe, the official added.

The ESI scheme is monitored and implemented by the Director of Insurance Medical Services (DIMS) in Andhra Pradesh. Employees earning a salary of less than Rs 21,000 per month in the industrial and service sectors contribute their share of 3.25%and 0.7% of their salary respectively for the ESI Scheme. The expenditure ratio between the state government and ESI Corporation is 1:7.

The entire expenditure is initially met by the state government and subsequently, the ESIC reimburses its share to the state government 

Read: Explained: The Rs 988-crore ESI scam in Andhra and why an ex-Min has been arrested

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