Inside the ₹ 371 crore scam: Exploring the events that led to Chandrababu Naidu’s arrest

Hyderabad: According to the Andhra Pradesh Crime Investigation Department, former chief minister Nara Chandrababu Naidu is believed to be the mastermind and the primary beneficiary of the alleged ₹ 371-crore scam in the state’s skill development corporation. 

The CID chief of Andhra Pradesh, N Sanjay, announced the arrest of the Telugu Desam Party national president on Saturday morning, citing him as the chief suspect in the case and expressing concerns over his potential influence on the investigation. 

 High Project Cost

Back in 2014, the Andhra Pradesh government issued an order to establish clusters of Siemens Centres of Excellence throughout the state. The technology partners, Siemens and Design Tech, were to contribute 90% of the funds as grant-in-aid, with the government providing the remaining 10% of a controversially inflated project cost of ₹ 3,300 crore. 

However, the memorandum of understanding (MoU) did not feature the 90% contribution from Siemens and Design Tech. This MoU was sanctioned by both Chandrababu Naidu and TDP State President K Atchannaidu, who is also implicated in the case. 

According to the CID, former minister Ganta Srinivas Rao was also part of the conspiracy. The Andhra Pradesh Skill Development Corporation was reportedly established, deviating from standard protocol and bypassing the council of ministers. 

Shell Companies 

CID Chief N Sanjay revealed that the Andhra Pradesh government released ₹ 371 crore, a significant portion of which was allegedly misdirected, leaving only a fraction to establish centres of excellence. The funds are believed to have been diverted through shell companies and falsified invoices. During the investigation, no actual deliveries corresponding to the invoices were discovered. 

Sanjay asserted that Naidu and other TDP leaders were among those who profited from the embezzled funds. 

“Our investigation, originating from the Andhra Pradesh Skill Development Corporation and leading all the way to the top echelons of corporate leadership, has revealed a fascinating, if troubling, connection. The trail of breadcrumbs has led us straight to N Chandrababu Naidu. This individual emerges as the mastermind and key player in a scheme that cleverly rerouted government funds into private hands via a network of shell companies,” shared the additional DGP with a note of gravity in his voice. 

“With his unique insights into the transactions that lead to the release of government orders and the signing of Memorandums of Understanding, he undeniably becomes the pivotal character in this investigation,” he further added. 

Even The Bureaucrats Raised Their Eyebrows

Senior IAS officers, including then chief secretary IYR Krishna Rao, principal finance secretary P V Ramesh, and special secretary (finance) K.Sunitha, had raised objections to the advance release of funds to Design Tech. They noted that this was being done on the instructions of then chief minister Chandrababu Naidu. 

The CID is currently investigating to identify the final recipients of the embezzled funds. This includes cash holdings recovered from suspects like Vikas Vinayak Khanvilkar, the then managing director of Design Tech. Key documents have reportedly gone missing, leading to the arrest of Naidu for questioning in custody along with other primary suspects. 

Sanjay stated that the “serious economic offense calls for custodial interrogation. Given Naidu’s significant political influence, there is a risk of him swaying the investigation. He was instrumental in the decision to release government funds in advance.” 

Siemens Takes a Step Back

Investigations by the Enforcement Directorate, Income Tax Department, and the Goods and Services Tax Intelligence Wing have also been conducted, according to sources in the Andhra Pradesh government. 

Siemens Industrial Software India Private Limited conducted an internal investigation and disassociated itself from its then managing director Suman Bose, alleging that he had acted without authorization. 

It has been revealed that Siemens received only ₹ 58.8 crores out of the ₹ 371 crores paid to Design Tech by the skill development corporation. Allegedly, Suman Bose, then MD of Siemens, and Khanvilkar, MD of Design Tech, siphoned off ₹ 241 crore. Undisclosed sums were also reportedly transferred to Hyderabad and Pune through hawala channels. 

laundering case related to the scam

Earlier this year, the ED arrested Bose, Khanvilkar, Mukul Chandra Agarwal – ex-financial advisor and signatory for Skillar Enterprises India Pvt Ltd – and Suresh Goyal, a chartered accountant, in a money-laundering case related to the scam. Properties estimated to be worth a staggering ₹ 31.2 crore, belonging to Design Tech, have been provisionally attached by the agency. 

Please, also have a look into : Former Andhra Pradesh CM Chandrababu Naidu appears in court amid corruption allegations