The puzzle that is skill development scam and Chandrababu Naidu’s alleged involvement

Andhra Pradesh’s Crime Investigation Department (CID) arrested former chief minister and Telugu Desam Party (TDP) chief Chandrababu Naidu on September 9 in connection with a fraud case involving misappropriation of funds from the Skill Development Corporation, leading to a loss of over Rs 300 crore to the state government, CID Chief N Sanjay had said after the arrest.

It all started in 2015, during the tenure of Chief Minister Chandrababu Naidu. The Andhra Pradesh government entered into a Rs 3,356 crore Memorandum of Understanding (MoU) for a skill development project. Siemens was set to provide 90% of the funding, with the government contributing 10%. The project was to be executed by the Andhra Pradesh State Skill Development Corporation (APSSDC) in collaboration with Siemens, Industry Software India Ltd, and Design Tech Systems Pvt Ltd.

The CID accused Naidu of playing a key role in a conspiracy to convert the Siemens and DesignTech project, primarily funded by private companies, into a government-funded initiative. The CID alleged that Rs 371 crore was released into the account of DesignTech before the project’s institutions were established or the work’s value was assessed.

The investigation revealed fake invoices from affiliated shell companies, such as PVSP IT Skills/Skillar Enterprises Pvt Ltd, Allied Computers International (Asia) Ltd, Inweb Services Pvt Ltd, and Patrick Info Services Pvt Ltd, Smith Solutions Pvt Ltd, Knowledge Podium, TalentEdge, and others, were used to divert APSSDC funds amounting to Rs 279 crore. These funds were allegedly misappropriated through bogus invoices without delivering the services specified in the agreement.

In 2017, the Directorate General of GST Intelligence (DGGI) and the Income Tax Department initiated an investigation, uncovering the misappropriation of at least Rs 241 crore out of Rs 371 crore by using fake invoices and Hawala transactions. This diversion was allegedly concealed under the guise of project management.

A forensic audit report conducted by APSSDC revealed that the sum of about Rs 241 crore was misappropriated through bogus invoices by the technology partners and others, causing wrongful loss to the state government.

The remand report also alleged that notifications related to the project were removed from the Secretariat by the accused once Central Tax Agencies began investigating the fund misappropriation network.

APSSDC was formed in 2014 without cabinet approval, including the appointment of its CEO and director, Ghanta Subbarao and K Lakshminarayana, respectively. It was reported that, with Naidu’s instructions, Ghanta Subbarao coordinated with Soumyadri Sekhar Bose to prepare cost estimations for the Siemens Project without proper documentation or justification.

Several arrests have been made in connection with the scam, including former MD of Siemens Software India Soumyadri Shekhar Bose, Vikas Vinayak Khanwilkar of Designtech Systems, former financial adviser Mukul Chandra Aggarwal, and Suresh Goyal, authorized signatory of Skiller Enterprises India Pvt Ltd.