Chandrababu Naidu arrest: What is the AP skill development scam?

The police also arrested TDP leaders Kaluva Srinivasulu, Bhuma Brahmananda Reddy, AV Subba Reddy, BC Janardhan Reddy, and Akhila Priya

Former Andhra Pradesh CM Chandrababu Naidu in custody (photo: Telugu Desam Party/ X)
Former Andhra Pradesh CM Chandrababu Naidu in custody (photo: Telugu Desam Party/ X)

NH Digital

In a high-octane bit of drama, former Andhra Pradesh chief minister and Telugu Desam Party (TDP) chief N Chandrababu Naidu was arrested in the early hours of Saturday, September 9 at Nandyal in Andhra Pradesh by the state police's crime investigation department (CID) in connection with the Skill Development Corporation corruption case.

The police also arrested TDP leaders Kaluva Srinivasulu, Bhuma Brahmananda Reddy, AV Subba Reddy, BC Janardhan Reddy, and Akhila Priya.

Naidu was camping in a caravan at Nandyal for the night after addressing a huge public meeting in the town, where he had criticised chief minister YS Jagan Mohan Reddy’s government for its alleged corruption.

A few days ago, Naidu had predicted that the police might arrest him in a “day or two”, which came true when the police detained him near the programme venue.

Government funds worth Rs 371 crore are alleged to have been misappropriated for the benefit of private firms and siphoned off using shell companies in the corruption scam.

CID insists that Naidu allegedly possesses exclusive knowledge of the transaction, and hence his custodial interrogation is necessary. The investigation is focusing on locating the missing funds, about which only Naidu knows, the CID claims.

CID ADG N Sanjay underscored that the agency would investigate the role of TDP general secretary and Naidu's son Nara Lokesh in the Fibrenet and Amaravati Inner Ring Road scams.

The police charges against Naidu relate to criminal conspiracy, cheating, forgery, breach of trust, destruction of evidence, and abetment.

Some of these sections involve non-bailable offences. Naidu will have to seek bail in court.

What is the case all about?

The case dates back to 2014, when the then TDP government under Naidu set up the Andhra Pradesh Skill Development Corporation (APSDC) to train unemployed youth to make them employable. With an estimated project cost of Rs 3,356 crore, a memorandum of understanding (MoU) was signed by APSDC and a consortium consisting of Siemens Industry Software India Ltd and Design Tech Systems Pvt Ltd (DTSPL).

The corporation had to collect content from various educational courses offered all over the country and abroad, and convert them into courses to be offered online to students who registered with the corporation.

Only 10 per cent of the total project cost was to be covered by the state government, while the remaining 90 per cent was to come in the form of a grant-in-aid by Siemens and Design Tech. Siemens was also tasked with establishing six centres of excellence.

On 19 January 2015, Naidu virtually inaugurated 17 skill development centres across the state. In 2018, however, a whistleblower approached the state's Anti-Corruption Bureau with allegations in the matter.

In March 2021, chief minister YS Jagan Mohan Reddy, who assumed office in 2019, said in the state assembly that the skill development corporation was a scam, and that Naidu was its main perpetrator and beneficiary.

Following a preliminary investigation, the AP CID registered an FIR on 9 December 2021 and took up the inquiry.

The CID has alleged that the TDP government released Rs 371 crore in a hurry within three months of the launch of the project without Siemens investing even a single rupee. While about Rs 130 crore was spent on the project, Rs 241 crore was allegedly diverted to at least five shell companies — Allied Computers, Skillers India Pvt Ltd, Knowledge Podium, Cadence Partners, and ETA Greens.

These companies were supposed to provide computers, software, and other items for the skill centres. But they did not provide or sell anything to the government, and the money was allegedly transferred to the companies based on fake invoices, with no actual delivery or sale of items mentioned in the invoices.

The funds were diverted with the alleged involvement of former APSDC CEO & MD Ghanta Subba Rao, along with then APSDC director K Lakshminarayana, according to investigating officials.

The CID also found that no note files were signed by the then principal secretary, Finance, and the then chief secretary, raising questions about transparency.

On 10 March this year, the Enforcement Directorate arrested Soumyadri Shekhar Bose, former MD of Siemens Industry Software (India), Vikas Vinayak Khanvalkar, MD of DesignTech Systems, Pune, Mukul Chandra Agarwal, MD of PVSP IT Skill Projects, and Suresh Goyal, chartered accountant of SSRA & Associates, for their alleged involvement in laundering Rs 241 crore through various shell companies. The four were booked under the Prevention of Money Laundering Act (PMLA).

ADGP Sanjay said one Manoj Vasudev Pardasni of DesignTech and Naidu’s personal assistant Pendyala Srinivas, who allegedly played key roles in the scam, have fled the country. He said Manoj left for the UAE on 5 September, while Srinivas is in the US.

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