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Former Andhra Pradesh Chief Minister and Leader of Opposition N Chandrababu Naidu was arrested on Saturday morning in connection with an alleged scam in the AP Skill Development Corporation that occurred during the Telugu Desam Party’s regime from 2014 to 2019.
The CID, which arrested him, has alleged that Naidu is the primary accused in the case, allegedly involving Rs 371 crore of government funds that were transferred to shell companies. The FIR in this case was registered on December 9, 2021. Naidu, who was touring Nandyal, was taken into custody early morning and then taken to Vijayawada for questioning. After his arrest, police issued a high alert across the state and confined senior TDP leaders under house arrest.
As per the CID, the Naidu government allegedly allocated Rs 371 crore for setting up skill development clusters for unemployed youth across the state after signing a Memorandum of Understanding with Siemens, but a significant portion of the money was diverted to shell companies linked to some Siemens employees and Skill Development Corporation employees. The money was then withdrawn and Naidu was the ultimate beneficiary of this scam, it is alleged.
“I have done nothing wrong. The CID has arrested me without any proof,” Naidu said after he was taken into custody.
“For the past 45 years, I have selflessly served Telugu people. I am prepared to sacrifice my life to safeguard the interests of Telugu people. No force on earth can stop me from serving Telugu people, my #AndhraPradesh and my motherland,” he tweeted.
The skill development cluster project in question had a total cost of Rs 3,356 crore, with the government contributing 10 percent, while Siemens committed to 90 percent of the funding. During the probe, Siemens conducted an internal inquiry and provided a statement under Section 164 of the Criminal Procedure Code (CrPC) before a Magistrate. It emphasised that their company had no involvement in the Joint Venture (JVO) or the MoU issued by the government.
One of the central issues in this case is the manner in which a note from Skill Development Corporation, showing the estimated cost as a detailed project report (DPR), was allegedly presented to the Cabinet, bypassing established government procedures. This alleged irregularity, combined with the swift approval and release of funds, led to questions regarding adherence to rules, regulations, and due process.
The Directorate of Enforcement (ED) had earlier served notices to 26 persons, including G Subba Rao, the former MD of AP Skill Development Corporation, and Dr K Lakshminarayana, IAS (then Director of APSSDC), in connection with the alleged scam.
During 2014–15, an agreement was signed with the then Chandrababu Naidu government to set up Centres of Excellence for Skill development training with two companies – Siemens India Software Ltd and DesignTech. They projected the project would cost about Rs 3,300 crore. The SISW and DT would sponsor 90% of the cost of the project as a grant – in kind. The Government of Andhra Pradesh had to pay 10% of the cost, that is, Rs 370 crore.
The Y S Jagan Mohan Reddy government has pointed out that the project was given the go-ahead without proper verification, and the proposal of the two firms was accepted. The entire contribution of the Government of Andhra Pradesh of Rs 370 crore was released in advance even before any work commenced, it has been alleged.
It is also alleged that the two firms did not spend anything out of their resources. Further, out of the Rs 370 crore released by APSSDC, Rs 241 crore was allegedly siphoned and converted into cash by using a chain of shell companies and fake invoices issued by them.
A complainant was received in 2018 by the ACB, after a case initiated by GST Intelligence wing, Pune. The then state government did not initiate any action. It is also alleged that important note files in the State Secretariat were removed and destroyed to cover the tracks of the accused in the case.
