On Saturday, September 9, 2023, Nandyal Police arrested former Andhra Pradesh Chief Minister and Telugu Desam Party President, N Chandrababu Naidu, during the early morning hours. N Chandrababu Naidu’s arrest pertains to his alleged involvement in the Andhra Pradesh State Skill Development Corporation (APSSDC) scam, where he holds the position of ‘Accused No. 1’. He was officially served a notice regarding this matter.
According to the notice issued under Section 50(1)(2) of the Criminal Procedure Code, the police officially notified Naidu of his arrest under multiple sections of the Indian Penal Code (IPC), including 120(8), 166, 167, 418, 420, 465, 468, 471, 409, 201, 109 read with 34 & 37, as well as other sections of the Prevention of Corruption Act, 1988.
The notice, underscoring the non-bailable nature of the offence, explicitly stated that Naidu would not be eligible for bail and must apply for bail exclusively through the court. CID Deputy Superintendent of Police M Dhanunjayudu signed it.
In March 2023, the Andhra Pradesh police’s Crime Investigation Department launched an investigation into an alleged ₹3,300 crore scam within the Andhra Pradesh State Skill Development Corporation (APSSDC) during the previous Telugu Desam Party government. According to an official statement from the chief minister’s office released in March 2023, the Crime Investigation Department (CID) had issued notices to Arja Srikanth, a former Indian Railway Traffic Service (IRTS) officer who served as the managing director and chief executive officer of APSSDC in 2016. These notices were issued following the statement provided by one of the accused, who expressed a willingness to become an approver in court, and the testimonies of three IAS officers.
In 2016, the Telugu Desam Party government in Andhra Pradesh established the Andhra Pradesh State Skill Development Corporation (APSSDC) to provide training and employment opportunities for the unemployed youth. During the initial investigation conducted by the CID, it was discovered that the previous government had entered into a memorandum of understanding (MoU) with a consortium comprising Siemens Industry Software India Ltd and Design Tech Systems Pvt Ltd. This MoU was in relation to the implementation of a project valued at ₹3,300 crore under the jurisdiction of the State Skill Development Corporation.
Under the terms of the MoU, Siemens Industry Software India was tasked with establishing six centres of excellence for skill development, with the project’s total value amounting to ₹3,300 crores. The state government was responsible for contributing approximately 10% of the overall project cost, while Siemens and Design Tech were to cover the remainder through grant-in-aid.
The AP state government’s official statement said, “The state government issued a GO granting a work order for ₹371 crore to Siemens and Design Tech to establish centres of excellence. No tender called for the project and this was done without the approval from the state cabinet. In fact, the CMO even sent out a note about the project and how the state government would benefit from it.”
According to the official statement from the Andhra Pradesh state government, the investigation uncovered that Siemens Industry Software India had not utilised any of its own funds for the project. Instead, a substantial portion of the ₹371 crore provided by the state had been illicitly redirected to shell companies such as Allied Computers, Skillers India Pvt Ltd, Knowledge Podium, Cadence Partners, and ETA Greens, as reported by the CID investigation.
CID alleged, “With a malafide intention, the agreement was drafted without any mention of the estimated cost of the project or the 90% in-kind grant to be given by Siemens and DesignTech. Ghanta Subba Raoand Dr K Lakshminarayana drafted the agreement in the form of a work order of Rs 370 crore being given by the APSSDC to Siemens and Design Tech. When the fraud got exposed in 2017-2018, the note files were destroyed illegally.”
The officials of the erstwhile Andhra Pradesh government disbursed Rs 370 crore to Design Tech, deviating from the established principles of the AP Civil Works Code and the Financial Code of AP. This substantial amount was advanced to Design Tech even before the commencement of the project. Furthermore, a sum of Rs 241 crore was redirected to a recently established entity, PVSP/Skillar Enterprises. This diversion occurred under the pretext of project management and was orchestrated by Suman Bose and Vikas Khanvelkar, with the active involvement of Mukul Chandra Agarwal.
The irregularities were first brought to light in 2017-2018 by central agencies, including the Directorate General of GST Intelligence and the Income Tax Department. During their investigation, they uncovered a fraudulent scheme involving bogus invoices that lacked any proof of actual goods or services delivered.
Siemens Global Corporate Office conducted an internal inquiry into the project and discovered that the project manager had illicitly funnelled the government-released funds to shell companies through hawala channels, resulting in his termination. The government release said, “In 2018, the ACB had received complaints from a whistleblower on these allegations. However, the people in power blocked any investigation from taking place and started removing key documentary evidence from the state secretariat.”
Additionally, the statement mentioned that both the GST intelligence wing and the IT department had already initiated investigations into the matter before the current state government took up the case. In light of these developments, the investigative agency will issue notices to other relevant officials involved in the case, as the official release said. In accordance with this statement, N Chandrababu Naidu – Accused no. 1 in this case – was issued a notice in this case, as all the alleged misappropriations took place in his regime. Immediately after serving the notice, Chandrababu Naidu was arrested in the APSSDC scam case as the sections imposed against him in this case are non-bailable.
