Explained: The corruption case against TDP chief Chandrababu Naidu

A few months after coming to power in 2014, the Andhra Pradesh government led by Telugu Desam Party president N Chandrababu Naidu proposed to establish AP State Skill Development Corporation (APSSDC), under public-private partnership mode, with an objective of developing employability skills to students studying non-professional courses and promoting the quality of entrepreneurship in them.

Also Read| List of cases against TDP leader, former ministers in Andhra

The corporation was to serve as an executive agency for the department of skill development, entrepreneurship and innovation in the Andhra Pradesh government.

As part of public-private sector model, the Naidu government signed a memorandum of understanding (MoU) with Siemens India in January 2015 to set up six skill development centres across the state in collaboration with Design Tech Systems Pvt Ltd.

The total project cost was ₹3,356 crore, out of which the state government would provide 10% only as a grant-in-aid while the rest would be invested by Siemens.

Also Read| Former Andhra CM Naidu arrested in graft case, TDP cadre stages protest

According to the Crime Investigation Department (CID) authorities, the Naidu government had established the corporation through an executive order without the approval from the cabinet.

The CID said the Naidu government issued a government order (GO No. 4 dated June 30, 2015) releasing ₹371 crore to Siemens and DesignTech for setting up of six centres of excellence, without any due verification of the credentials of the companies, their financial worth, the actual market prices of the products offered by them.

No tender called for the project, and this was done without the approval from the state cabinet. The funds were released even before identifying the places where the Skill development centres had to be set up. No performance guarantee or bank guarantee was sought from Siemens and DesignTech, before releasing the amount, the police had claimed.

In fact, senior IAS officials in the Naidu government, including then chief secretary IYR Krishna Rao, PV Ramesh and K Sunitha, wrote in the note-files raising objections to the release of funds in advance to DesignTech. They also indicated that the funds were being released as per the instructions of the then chief minister.

The CID said two of these senior IAS officers also deposed to this effect under Section 164 Criminal Procedure Code before a magistrate during the investigation later.

The CID said the investigation revealed that Siemens Industry Software India and Design Tech had not spent a single rupee from their own resources on this project, but in fact, siphoned off major portion of ₹371 crore contributed by the state government.

Investigations revealed that the money was diverted to shell companies like Allied Computers, Skillers India Pvt Ltd, Knowledge Podium, Cadence Partners and ETA Greens.

In June 2018, the ACB had received complaints from a whistle blower on these allegations. However, the people in power blocked any investigation from taking place and started removing key documentary evidences from the state secretariat, the CID charged.

In 2018, the central agencies like Enforcement Directorate, GST intelligence wing and IT Department also initiated a probe into the case acting on a complaint from a whistle blower.

In fact, Siemens Global Corporate Office had conducted an internal investigation into the project and found that the then MD of Siemens India Suman Bose had acted on his own without authorization from the global headquarters or its legal team. He was fired later.

Investigations revealed that Suman Bose and Vikas Khanvilkar, MD of DesignTech, used a network of shell companies to issue fake invoices, without the actual delivery of the goods and services and siphoned off the funds to the extent of ₹241 crores. The Siemens received only ₹ 58.8 crore out of the ₹371 crores paid to Designtech by APSSDC.

While the CID is continuing its investigation to trace the end-beneficiaries of the misappropriated monies, the Enforcement Directorate, too, launched an investigation on the aspect of money laundering involved in the issue.

The ED authorities arrested Suman Bose, Vikas Khanvelkar and two others in a money laundering case for diversion and misutilization of funds. The ED provisionally attached properties amounting to ₹31.20 crore belonging to DesignTech Systems.