Whistleblower blew lid off Rs 371 crore Skill Development Corporation scam
VIJAYAWADA: The ₹371 crore AP Skill Development Corporation scam came to light in 2018 when a whistle-blower reported the matter to the Anti-Corruption Bureau (ACB) unit in the state.
The government whistleblower warned about the scam in June 2018. But at the time, investigations were set aside.
It has taken more than five years for the scam to cause shockwaves in AP with the arrest of Telugu Desam supremo Nara Chandrababu Naidu early on Saturday morning at Nandyal by the AP Crime Investigation Department (CID).
The allegations against Naidu and others include manipulating contracts, misappropriating public money, and orchestrating a fraudulent scheme under the umbrella of a skill development corporation.
After Y.S. Jagan Mohan Reddy assumed charge as AP Chief Minister, his government concentrated on unravelling this scam. Central agencies, such as IT, ED, and SEBI also got involved. Authorities managed to successfully repatriate funds stashed abroad.
Interestingly, the scandal took place just two months after Chandrababu Naidu assumed power in June 2014. The total skill project amount had been ₹3,356 crore, with the government contributing 10 per cent, while Siemens committed 90 per cent of the funding.
Incidentally, Siemens, a major player, has conducted an internal inquiry. It has made a statement under Section 164 of the Criminal Procedure Code (CrPC) before a magistrate, emphasizing that the company has no involvement in the joint venture (JV) or the memorandum of understanding (MoU) issued by the government.
This exposed the establishment of a fake company misusing Siemens’ name for the MoU.
Sleuths unravelled one of the central issues in the case being a note from the skill development organisation, indicating the estimated cost in a Detailed Project Report (DPR) presented to the state cabinet, bypassing the established government procedures. This irregularity, combined with swift approval and release of funds, led to serious questions over adherence to rules, regulations, and due process.
Investigators further found that the contract and government orders appear to be at odds with each other. Funds had been released even without a clear contract. The allegation is that Chandrababu Naidu himself ordered the immediate release of funds, even though finance department officials raised objections. Bucking to Naidu, key officials within the government, including the principal secretary (Finance) and the Chief Secretary reportedly facilitated the release of funds.
It has come to light that over 70 transactions involving huge amounts had taken place through shell companies. In a troubling twist, notes made on files related to the project had allegedly been destroyed when investigations commenced.
Complicating matters, companies such as PVSP / Skiller and DesignTech, which played a significant role in the skill scam, claimed CENVAT (Central Value Added Tax) without paying service tax. Suspicion arose when GST officials noticed this irregularity in the company's transactions, which eventually revealed money transfers through hawala channels as early as 2017.
Enforcement Directorate (ED) has raided and arrested top individuals involved in this massive scam, including former MD of Siemens Software India Soumyadri Shekhar Bose, Vikas Vinayak Khanwilkar of Designtech Systems, and former financial adviser Mukul Chandra Aggarwal. Suresh Goyal, authorized signatory of Skiller Enterprises India Pvt. Ltd., is also among those arrested.
A case of funds’ misuse and money laundering had been registered and investigations moved further. Naidu’s arrest has come in its wake.
