Skill Development Scam: No Relief to Naidu, But AP HC Stays CID Plea Seeking Custody, Hearing on 19 Sep

The Andhra Pradesh High Court on Wednesday scheduled a hearing for September 19th on TDP supremo N Chandrababu Naidu’s petition seeking the annulment of the FIR filed against him in the Skill Development Corporation scam case, which involves multiple crores of rupees. But the same time High Court stayed the proceedings in a petition filed by the state CID seeking the custody of TDP chief N Chandrababu Naidu in connection with the multi-crore Skill Development Corporation scam, till September 18.

Furthermore, the court instructed the Andhra Pradesh Crime Investigation Department (CID) to submit its response.

Naidu, the former chief minister, is presently in judicial custody and detained at the Central Prison in Rajamahendravaram due to a case initiated by the Andhra Pradesh CID.

Furthermore, a representative for the state government has noted that both parties have agreed not to press on a petition filed by the CID in the lower court seeking Naidu’s police custody till the next hearing.

The former chief minister was arrested due to his alleged involvement in a multi-crore Skill Development Corporation scam. Currently, he is incarcerated at the Rajamahendravaram central prison after the Vijayawada court remanded Naidu in judicial custody for 14 days on Sunday.

On Monday, a team of lawyers, led by senior counsel Siddharth Luthra, representing Naidu, filed a petition seeking house custody for the former CM, citing concerns about his safety. It’s worth noting that Naidu has held Z-plus category security protection for several years, with a team of NSG commandos continuously guarding him.

However, the court declined the request for house arrest, citing security concerns. Jayakar Matta, Naidu’s lawyer, stated that the court believed that Z-plus security could not be provided under house arrest, making jail a safer option for Naidu rather than staying at home under house custody.

In court, the CID’s legal team argued that they had taken several steps in compliance with the court’s orders, including creating a separate and exclusive ward for Naidu, providing special security cover, implementing round-the-clock monitoring, video surveillance, and having a medical team on standby, among others.

They emphasized that Naidu’s ward had been isolated from the main prison block to ensure a sanitized area, especially considering his special security requirements. Additional precautions were taken, such as deploying armed guards outside the special ward. Strict access controls were also put in place, and visits to Naidu require his prior consent.

The CID lawyers informed the court that senior prison officials, led by the superintendent of the Rajamahendravaram central prison, were present round-the-clock for personal supervision of security and other arrangements. They assured the court that they were fully complying with all its directives.

What is the Skill Development Scam that the AP CID is accusing Chandrababu Naidu of being involved in

In 2014, shortly after assuming office as the Chief Minister of Andhra Pradesh, N. Chandrababu Naidu proposed the establishment of a Skill Development Corporation aimed at creating skill development clusters throughout the state to equip unemployed youth with valuable skills.

Under this initiative, the corporation aggregated educational content from various sources, both within India and abroad, and converted it into online courses accessible to registered students.

Naidu’s government entered into a Memorandum of Understanding (MoU) with Siemens India to establish skill development centers. The project was to be carried out through a partnership between APSSDC and a consortium comprising Siemens, Industry Software India Ltd, and Design Tech Systems Pvt Ltd, with Siemens tasked to establish six centers of excellence.

As per the MoU terms, the total project cost amounted to Rs 3,356 crore, with the state government providing only 10 percent as a grant-in-aid, while Siemens was responsible for the majority of the investment. On January 19, 2015, Naidu inaugurated 17 skill development centers across the state via virtual means.

However, in March 2021, Chief Minister Y.S. Jagan Mohan Reddy alleged in the Andhra Pradesh Assembly that the skill development corporation was involved in a fraudulent scheme, and that Naidu was the primary instigator and beneficiary of this wrongdoing. Following a preliminary investigation, the AP CID registered an FIR on December 9, 2021, and initiated a formal investigation.

What are the allegations made by the AP CID

The principal allegations revolve around the claim that the TDP government, during Naidu’s tenure, expedited the release of Rs 371 crore within three months of launching the project, despite Siemens not contributing any funds.

Approximately Rs 130 crore was purportedly spent on the project, while Rs 241 crore was allegedly diverted to at least five shell companies, including Allied Computers, Skillers India Pvt Ltd, Knowledge Podium, Cadence Partners, and ETA Greens. These entities were supposed to supply computers, software, and other materials for the skill centers, but they reportedly failed to deliver any goods or services to the Andhra Pradesh government. The funds were allegedly transferred to these companies based on falsified invoices, with no actual provision of the items mentioned in the invoices.

Additionally, a portion of the funds was purportedly used to establish the skill development clusters, deviating from official procedures.
The CID investigation also revealed that critical documentary evidence linked to the scandal was potentially tampered with or destroyed, as there were no signed note files by the then Principal Secretary of Finance and the then Chief Secretary, raising concerns about transparency.

According to the CID’s findings, Naidu and the TDP party were the ultimate beneficiaries of this alleged scam. The CID claims that the former Chief Minister was the mastermind behind the scheme, facilitating the transfer of public funds to private entities.

Based on the FIR filed by the AP CID, the Enforcement Directorate conducted a separate inquiry.