The multi-crore Andhra Pradesh Skill Development Corporation scam that rocked the state was recently brought up in the state Assembly, with CM Jagan Mohan Reddy accusing Telugu Desam Party (TDP) and former CM Chandrababu Naidu of orchestrating it. Speaking in Assembly on Monday, March 20, CM Jagan alleged that Naidu of “expertly planned, directed, and carried out the scam and his government hastily paid 371 crore in five tranches over the course of just three months”, referring to the order detailing that 10% of the Rs 3,356 crore for the development of the scheme would be paid by the government.
“No note files were signed by the then principal finance secretary and the then chief secretary and attempts were made to destroy documentary evidence,” he further alleged. The Andhra government had signed a Memorandum of Understanding (MoU) with German company Siemens for the skill development programme, with the government offering to fund 10% of it.
Meanwhile, the TDP dismissed the allegations and accused CM Jagan of being corrupt himself. Chairman of the TDP’s Public Accounts Committee, Payyavula Kesav, questioned CM Jagan’s motives in bringing up the matter. “If the issue is brought up on the House floor while the investigation is underway, does that not amount to trying to influence the investigating agencies,” he asked. So what is the skill development scam? Here’s an explainer:
The Andhra government, led by the Telugu Desam Party (TDP) at the time, established the Andhra Pradesh Skill Development Corporation (APSDC) in 2014 to train unemployed youth in various areas and enhance their skills in order to make them employable. However, the corporation ended up mired in corruption scams.
With a project estimation of Rs 3,300 crore, a memorandum of understanding (MoU) was signed by the APSDC and a consortium consisting of Siemens and Industry Software India Ltd and Design Tech Systems Pvt Ltd. The Government Order stated that Siemens would establish six ‘centres of excellence for skill development in the state and only 10% of the total project cost would be covered by the state government, while the remaining 90% would be provided in the form of a grant-in-aid by Siemens and Design Tech.
However, according to the Enforcement Directorate’s investigation into the matter, the government violated the AP Civil Works Code and the AP Financial Code by releasing Rs 371 crore (including taxes) even before the project started and without calling for any tenders. The funds were diverted with the alleged involvement of the former CEO & MD, along with the director of the APSDC, according to the ED. The officials allegedly drafted the work order for Rs 371 crore without mentioning the 90% in-kind grant provided to the companies, the agency further alleged.
The scam came to light after a whistleblower complained to the Anti Corruption Bureau (ACB) in 2018, following which documentary evidence was allegedly destroyed. In addition, the GST intelligence wing and IT Department was also investigating the case, even before the state government took up the investigation. Later, based on an FIR from the Andhra Crime Investigation Department (CID), the ED took up the case.
According to investigation reports, a significant portion of the Rs 241 crore received by Siemens from DTSPL were diverted through a web of shell companies under the guise of supplying software and hardware goods and services. However, these were used to generate cash even without receiving any goods or services from the shell companies.
The report also revealed that the ED found ‘token numbers’ which allegedly linked the government-released money that was syphoned off to shell companies. The money was diverted to shell companies like Allied Computers, Skillers India Pvt Ltd, Knowledge Podium, Cadence Partners and ETA Greens, the report said.
On March 4, the ED arrested four accused — Soumyadri Shekhar Bose (former MD of Siemens Industry Software (India) Private Limited), Vikas Vinayak Khanvalkar (MD of DesignTech Systems Limited in Pune), Mukul Chandra Agarwal (Financial advisor at Siemens) and Suresh Goyal (Chartered Accountant of SSRA & Associates) — in connection with the scam. The investigating agency produced them in Visakhapatnam Prevention of Money Laundering Act (PMLA) court and they are currently under its custody.