TDP leader K Atchannaidu arrested by ACB in connection with multi-crore ESI scam

Atchannaidu was accused in the ESI scam in the Vigilance and Enforcement Department report that unearthed Rs 404.86 crore scam in February.

Published: 12th June 2020 10:37 AM  |   Last Updated: 12th June 2020 01:18 PM   |  A+A-

K Atchannaidu

TDP leader K Atchannaidu (Photo | EPS)

By Express News Service

VIJAYAWADA: Former labour minister and TDP leader Assembly Kinjarapu Atchannaidu was arrested by the Anti-Corruption Bureau (ACB) at his residence in Srikakulam district early this morning for his alleged involvement in the multi-crore Employees’ State Insurance Corporation (ESIC) scam. 

Five others were also taken into custody from different parts of the State.

An ACB team led by DSP (CIU) TSRK Prasad, accompanied by local police, arrived at the residence of the TDP leader at Nimmada village in Kotabommali mandal around 7.20 a.m.

He is being brought to Vijayawada, where he would be produced before an ACB Special Court at 4 pm.

Atchannaidu’s name first cropped up in the Vigilance and Enforcement Department probe in February this year.

The V&E department investigated alleged irregularities in procurement of drugs and medical equipment between 2014 and 2019 when TDP was in power and Atchannaidu was the labour minister.

Briefing the media in Vizag, ACB Joint director Ravi Kumar said along with Atchannaidu, five others involved in the case - Chintala Krishnappa Ramesh Kumar, retired director of  IMS (Directorate of Insurance and Medical Services), Dr. G Vijaya Kumar, retired special grade civil surgeon, ESI Hospital Rajamahendravaram and former director of IMS, Dr. V Janardhan, retired joint director of IMS, Kadapa, E Ramesh Babu, senior assistant, DIMS, AP, Vijayawada, and MKP Chakravarthi, superintendent of DIMS, AP, Vijayawada (currently suspended), were also arrested simultaneously in Tirupati, Rajamahndravaram and Vijayawada.

He said as per the directions of the State Government, the V&E department had probed alleged irregularities in ESI hospitals and dispensaries across the State in the matter of procurement of drugs, and medical equipment, among others and found a deep-rooted scam involving hundreds of crores.

After the V&E department submitted its report, the State Government had directed the ACB to register a case against the accused and investigate.

“The ACB during the course of investigation found an amount of Rs 150 crore was misappropriated in the process of procurement of medicines and equipment worth Rs 988.77 crore. As many as 19 government officials and private persons are involved in the scam,” Ravi Kumar explained.

According to him, the irregularities took place in the procurement of medicines on non-rate contract basis, procurement of lab kits, surgical items, furniture, bio-metric devices and agreements for call center and ECG services.

Several guidelines were violated resulting in huge losses to the government. Medicines and surgical equipment were procured at a price that was 50-129 per cent in excess of the market price. Instead of e-Tender procedure, they were procured on nomination basis.

 Ravi Kumar further said fictitious companies in the name of some of the staff members in the Directorate of Insurance and Medical Services  (DIMS) were floated and agreements inked for procurement of medicines, medical equipment, and services.

“Some staff members of DIMS had used forged letterheads and envelopes for file quotations and even produced fake bills. We have identified some who are involved in such irregularities and are still investigating,” he said.

In regard to the Call Centre, Toll-Free and ECG services, he said on the directions of the then minister for labour Atchannaidu, M/s Tele Health Services Private Limited was given the contract by the then IMS director CK Ramesh Kumar.

“For each ECG Rs 480 was paid, while for ECG in other hospitals, the cost was only Rs 200. Further, ECG services were rendered by diploma holders instead of cardiologists. Rs 1.80 per call was claimed for not only the calls received at the call centre, but also for the entire registered IP of the service provider and also fake calls,” he explained.

The ACB joint director said investigation into irregularities in sewerage plants and bio-medical waste disposal plants is in progress.

This is kidnap by police: Chandrababu Naidu

Describing Atchananidu’s arrest as police kidnapping, TDP chief N Chandrababu Naidu alleged that the Jagan government has intentionally arrested his party colleague in an unprecedented manner with 100 plus police. 

“Even phone connections were cut off to prevent Atchannaidu from calling even his family members. This is vendetta. He was arrested without any evidence,” he said.

Claiming that notices were not served before Atchannaidu’s arrest, that too four days before the commencement of the Budget Session of the State Assembly, he demanded that Chief Minister YS Jagan Mohan Reddy, Home Minister Sucharita and DGP Gautam Sawang explain to the people the real motive behind the Srikakulam strongman’s arrest.

The TDP chief gave a call to the party cadre to stage protests at Jyothi Rao Phule and DR BR Ambedkar statues, to condemn the arrest of Atchannaidu. He also rang up Atchannaidu’s family members and assured them of the party’s support. Naidu’s son Lokesh also spoke to the family members of Atchannaidu.  

Law will take its own course: Home Minister

Home Minister Sucharita, commenting on the TDP leader’s arrest, asserted that the law will take its own course.

“The ACB has arrested him for corruption. Large-scale irregularities took place in the procurement of medicines and equipment. The law will take its own course. Shouldn't we take action against the corrupt?” she asked and pointed out that during Atchannaidu’s stint as labour minister, contracts were awarded on nomination basis to whoever they wanted, without inviting tenders.

In some instances, equipment worth Rs 15,000 was bought for Rs 60,000. 


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