Chandrababu Naidu arrested: What is the multi-crore skill development scam? Explained

Telugu Desam Party (TDP) president and former Andhra Pradesh chief minister N Chandrababu Naidu was arrested in a multi-crore AP State Skill Development Corporation (APSSDC) scam in the early hours of Saturday. Several TDP leaders have also been placed under house arrest following the arrest of Chandrababu Naidu.

CID served arrest warrant to former Andhra Pradesh CM Chandrababu Naidu.

A large contingent of the police led by Nandyal range DIG Raghurami Reddy and the Crime Investigation Department (CID) arrived at RK Function Hall while Naidu was resting in his caravan. TDP supporters gathered in large numbers and resisted the police, with even SPG forces guarding the former CM initially preventing access to Naidu.

Eventually, at around 6 am, the police managed to arrest the TDP chief, and he is now being transported to Vijayawada. Naidu was arrested on non-bailable charges under Sections 120(8), 166, 167, 418, 420, 465, 468, 471, 409, 201, 109 r/w 34 & 37 IPC and other sections of the Prevention of Corruption Act, 1988.

The arrest comes days after the TDP supremo predicted his fate during an interaction with the public at Rayadurgam in Anantapur district today and alleged that he could even be attacked.

“Today or tomorrow they could arrest me. They may even attack me. Not one, they will do many atrocities,” Naidu said on Wednesday pointing out to the YSRCP government.

What is AP State Skill Development Corporation scam?

In March, the Crime Investigation Department of the Andhra Pradesh police initiated a probe into an alleged scam worth 3,300 crore in the APSSDC during the previous Telugu Desam Party regime. The investigation follows notices issued to Arja Srikanth, a former Indian Railway Traffic Service (IRTS) officer who was the CEO of APSSDC in 2016, based on statements from an accused turned approver and depositions by three IAS officers.

In 2016, during the tenure of the TDP government, the APSSDC was established with the aim of empowering unemployed youth by providing skill training to enhance their employability.

The preliminary investigation by the CID revealed:

  • The TDP government entered into a Memorandum of Understanding (MoU) for a project valued at 3,300 crore.
  • This MoU involved a consortium with Siemens Industry Software India Ltd and Design Tech Systems Pvt Ltd.
  • Siemens Industry Software India was tasked with establishing six centres of excellence for skill development.
  • The state government was supposed to contribute around 10% of the total project cost, while Siemens and Design Tech would provide the remaining funds as grant-in-aid.

The investigation uncovered several irregularities:

  1. Lack of tender process: The project was initiated without following the standard tendering process.
  2. Bypassing Cabinet approval: The state cabinet did not provide approval for this project.
  3. Misappropriation of funds: Siemens Industry Software India allegedly failed to invest any of its own resources in the project and instead diverted a substantial portion of the 371 crore allocated by the state to various shell companies.
  4. Shell companies: The funds intended for the project were funnelled into shell companies, including Allied Computers, Skillers India Pvt Ltd, Knowledge Podium, Cadence Partners, and ETA Greens.

Siemens Global Corporate Office initiated an internal inquiry into the project and discovered that the project manager had misappropriated the government-allocated funds to shell companies as hawala transactions. Consequently, the project manager was dismissed.

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