Naidu architect-in-chief of skill development scam: APCID

It explained that during the course of investigation, 141 witnesses were examined and their statements recorded.

TDP supremo N Chandrababu Naidu arrives at the civil court in Vijayawada on Sunday. (Photo | Prasant Madugula)

VIJAYAWADA: The 28-page remand report of TDP national president and former Chief Minister N Chandrababu Naidu, one of the accused in the Rs 371 crore AP State Skill Development Corporation scam, filed in the ACB Special Court on Sunday, stated that though the accused has been listed as Accused Number 37, he is the chief architect and principal conspirator of the offence.

Naidu was charged with criminal conspiracy, disobeying law, cheating, forgery, causing disappearance of evidence of offence, abetment and abusing position as a public servand causing wrongful pecuniary loss to the government exchequer.

The remand report explained the genesis of the case and the role of other accused and how the funds were diverted to shell companies, how tripartite agreement was reached in contradiction of the GOs issued for the project and how a  project envisaged to be 90% funded by the technology partners was converted into work order of Rs 371 crore given on nomination basis.

It explained that during the course of investigation, 141 witnesses were examined and their statements recorded. On verification of documents and examining the witnesses, it was revealed that Naidu orchestrated the deep-rooted conspiracy by playing a key role at various stages, in collusion with the other accused, with a preconceived plan aimed at siphoning off of the funds released from the State exchequer towards the project. Naidu’s name was added to the list of the accused vide memo dated September 8, 2023 and the same was submitted to the court. The Enforcement Directorate proceedings against Shekhar Bose, Vinayak Kanvelkar, Mukul Chandra Agarwal and Suresh Goyal were explained.

TDP chief N Chandrababu Naidu greets people while being brought to the ACB Special Court in Vijayawada and the former chief minister with his party leaders and the counsel at the court; TDP activists stage a protest against the arrest of Naidu | Prasant Madugula / Express

A synopsis of the specific role played by Naidu was given, which explained the whole sequence of events from setting up APSSDC to siphoning off funds. It said the vendors of DesignTech and SISW approached Naidu through an intermediary Illendula Ramesh (TDP leader) and submitted the proposal of setting up centres of excellence for skill development.

To misappropriate the money from the public exchequer, Naidu orchestrated the incorporation of AP State Skill Development Corporation, bypassing the cabinet and appointed handpicked people -- Ghanta Subba Rao and K Lakshminarayana. A new department for skill development, entrepreneurship and innovation was created as controlling department for APSSDC and it was under K Atchannaidu, the then minister.

Merely based on the PowerPoint presentation given by representatives of DesignTech and SISW, Naidu and Atchannaidu gave a concurrence to the project without making any market survey.  

Hiding the fact that no DPR was prepared, Naidu and Atchannaidu gave a false projection before the cabinet that the estimated cost of the project would be Rs 3,281 crore (approximately), of which technology partners would meet 90% of the cost as grant-in-kind and the State government has to invest only 10% towards the cost of the project.

The note file with proposal for approval of the draft of GOs and later draft of tripartite agreement, which mentioned that State government would release Rs 371 crore as grant for SISW and DesignTech was approved by Naidu and Atchannaidu. After the agreement, the entire amount was released to DesignTech, even before the sites for the skill development centres were selected, without obtaining any performance guarantee or bank guarantee. The then Finance Secretary K Suneetha objected to the same and she also objected to release of the funds.

Further, the note files pertaining to the project were removed from the Secretariat by the accused, soon after Central agencies started unearthing the network of misappropriation of funds. Naidu was said to be the principal conspirator and the architect of entire scheme.In the remand report, the CID said Naidu was non-cooperative during interrogation and replied vaguely stating that he did not remember certain things.

Seeking Naidu’s judicial custody, the remand report stated that though the officials arranged a chopper to take him to Vijayawada from Nandyal where he was arrested, the Leader of the Opposition refused. The convoy was obstructed several times by TDP cadres, which was an indication of intimidating law enforcement officials by virtue of his position.

Enforcement Directorate probe
The ED initiated proceedings under the PMLA 2002 on March 4, 2023 and the investigation is in progress with regard to money laundering. The ED has arrested Soumyadri Shekhar Bose of SISI, Vinayak Khanvelkar of DesignTech, Mukul Chandra Agarwal, authorised Signatory of Skillar Enterprise India Pvt Limited, Suresh Goyal, CA in a money laundering case for diversion and misutilisation of funds of APSSDC and others

Modus operandi for fund swindle
Investigation revealed that a system existed for generating bribes for Naidu from the various work contracts issued by the Government of Andhra Pradesh between 2017 and 2019. There was a modus operandi of generation of cash through bogus invoices for procurement of works, goods and services by the sub-contractors of the main contractors executing the work. The cash was handed over to the persons and at places as directed by Naidu, by the representatives of the firms executing the works

Letter written to CBDT for info
As per the investigation carried out by the Income Tax Department, one of the main persons involved in the modus operandi was Yogesh Gupta (A22). He, along with Manoj Vasudev Pardasany representing Shapoorji Pallonji, was involved in generating cash from the funds drawn from the public exchequer, through fake invoices. The cash was handed over to Pendyala Srinvas, a government employee, who was working as personal secretary to N Chandrababu Naidu, and Kilaru Rajesh, a close associate of Naidu and his son Lokesh. For getting the certified copies of the evidences from the Income Tax Department, a letter was sent to the Chairman of Central Board of Direct Taxes (CBDT) and the material is awaited

‘Atchannaidu one of beneficiaries’  
The remand report stated that K Atchannaidu, the then minister, was co-conspirator of Naidu. APSSDC was under his ministry and he was intimately aware of all the decisions made regarding APSSDC and Siemens project. He and Naidu were the ones to explain to the cabinet the project cost. The report says he is also one of the beneficiaries of the amount siphoned off

IAS officers’ objections

• The then Principal Secretary (Finance) in para number 35 of the note file of GO Ms No 47 regarding APSSDC formation noted that ‘creation of a new corporation requires cabinet approval’. However, Naidu approved the same noting ‘issue immediately’
• In the note file of GO No 2452, regarding release of funds of Rs 270 crore to Siemens project, the Principal Secretary remarked that the ‘department is requested to work out protocol for operation of funds’
• On this the then Chief Secretary IYR Krishna Rao instructed with note that ‘para No 27 is agreed in a meeting conducted by CM. Finance may release BRO accordingly’. At the note of the CM column it was mentioned that ‘ai’ i.e., after issue. This means after issuing a budget, file may be put up to CM as already CM instructed CS to release funds
• In the note file of GO No 2452,K Suneetha, Secretary, Finance clearly remarked by verifying all aspects that ‘it may be advisable for the government to reconsider releasing the total amount. May be a pilot project in one area as endorsed in para No 21 with Rs 55 crore and asked for orders’
• On this, Principal Finance Secretary instructed with note vide para No 161 and 162 that ‘the Chief Secretary spoke to me (PFS) today requesting for immediate clearance of the file. Mr G Subba Rao met me (CS) and requested for release of money as decided by the CM. Considering the decision of CS/CM, orders of CS at para 31 on page 46 may be implemented. The skill development department asked to furnish a copy of the MoU for  our record’
• On note file regarding GO No 13, the Chief Secretary has made his remarks that ‘issue is discussed in the meeting with CM. An amount of Rs 25 crore BRO may be released and file put after issue’  
• On note file regarding GO No 12, the Chief Secretary noted that ‘para No 27 is agreed (release of Rs 270 crore) to in the meeting conducted by CM. Finance may release BRO (for  Rs 270 crore) accordingly’
• Secretary Finance K Suneetha while circulating note file regarding sanction of budget for Siemens project clearly mentioned that ‘must ascertain whether the machines provided are outdated or contemporary’