Chandrababu Naidu arrested: What is the alleged multi-crore skill development scam

Former Andhra Pradesh Chief Minister and Telugu Desam Party (TDP) chief N Chandrababu Naidu was arrested Saturday morning for his alleged involvement in the Andhra Pradesh Skill Development Corporation (APSSDC) scam. The Andhra Pradesh Crime Investigation Department (CID) took him into custody around 6 am at the R K Function Hall in Gnanapuram, Nandyalna town, police said.

Chandrababu Naidu is facing charges under several sections of the Indian Penal Code (IPC), including Sections 120B (criminal conspiracy), 420 (cheating and dishonestly inducing delivery of property) and 465 (forgery). The AP CID has also invoked the Prevention of Corruption Act against him.

It's alleged that Chandrababu Naidu conspired and approved a memorandum of understanding (MOU) for the skill development department, breaking the rules to redirect funds, reported The Times of India.

According to the CID, these funds were redirected to shell companies, then withdrawn as cash, and later transferred to individuals linked to Naidu. The first revelation of this wrongdoing came from the director general of GST Intelligence.

The CID alleges that back in 2015, officials from Siemens Industry Software India Pvt. Ltd. (SISW) and DesignTech Systems Private Limited, Pune, conspired with N Chandrababu Babu Naidu and IAS officials of the Andhra Pradesh government to improperly take funds from the state treasury, the report added.

According to the CID's allegations, Siemens officials presented PowerPoint presentations to the then Chief Minister N Chandrababu Naidu, where they inflated the cost estimation of the proposed Siemens Skill Development Centers project.

They worked in collusion with government officials, including Ghata Subba Rao, the secretary of the skill development department, and Dr K Lakshminarayana, retired IAS and MD & CEO of AP State Skill Development Corporation.

In these presentations, they claimed that a skill development project worth Rs 3,300 crore would require only Rs 330 crore as a contribution from the Andhra Pradesh government. They stated that 90 percent of the project's cost would be covered by an “in-kind grant” from technology partners.

The report further notes that Suman Bose, the then MD of SISW, Gurgaon, and Vikas Khanvelkar, MD of DesignTech, agreed on June 30, 2015, contradicting official guidelines. Typically, projects should have a detailed project report, and cost estimates should align with prescribed rates or market survey findings.

However, N Chandrababu Naidu approved the Siemens Skill Development Centers proposal solely based on PowerPoint presentations, bypassing these requirements. Moreover, the Memorandum of Agreement for the project, sent for approval, was drafted without mentioning the estimated project cost or the promised 90% in-kind grant.  Later, this agreement was approved by Chandrababu Naidu.

When the fraud came to light in 2017-2018, records associated with it were unlawfully destroyed. Under Naidu's instructions, the government and skill development department released Rs 370 crore as an advance to DesignTech, even before the project started. Subsequently, Rs 241 crore was diverted to a newly established company called PVSP/Skillar Enterprises, under the guise of project management, as per the plan devised by Suman Bose and Vikas Khanvelkar, with the involvement of Mukul Chandra Agarwal.

These irregularities were identified in 2017-2018 by central agencies such as the Directorate General (GST Intelligence) and the Income Tax Department when they uncovered a scheme involving fake invoices with no actual delivery of goods or services.

Meanwhile, following Chandrababu Naidu’s arrest, the former chief minister vehemently denied any wrongdoing. Speaking to the media before being shifted to Vijayawada, he expressed his innocence and questioned the validity of the charges against him.

 

“The police came to the area last night and created a lot of fuss, and when I asked them to show proof of my committing any mistake, they failed to produce any such evidence,” News Meter quoted Chandrababu Naidu as saying.

“The ruling party is very keen on somehow foisting some false case against me, which is highly undesirable,” he added.