The Enforcement Directorate (ED) has launched an investigation into the alleged siphoning of government funds using shell companies in the multi-crore Andhra Pradesh State Skill Development Corporation (APSSDC) scam that is being probed by the Andhra Pradesh Crime Investigation Department (CID).
The ED recently issued notices to the 26 accused in the approximate ₹241-crore scam and has also started questioning them, since money laundering is also at play in the alleged scam.
The 26 accused include former IAS officers K Lakshminarayana and Ghanta Subba Rao, who served as top executives of the APSSDC when the alleged scam took place, and also former top executive of US-headquartered Siemens, Soumyadri Shekhar Bose.
Lakshminarayana worked as the special secretary in the chief minister’s office during the N Chandrababu Naidu TDP regime, before 2004. After his retirement, he took his place as a director at APSSDC.
Subba Rao served as special secretary in the Skill Development, Entrepreneurship and Innovation Department during Naidu’s rule, between 2014 and 2019, and was also the founder-managing director and chief executive officer of APSSDC.
Scam, sham and everyone’s in a jam
The alleged siphoning by the 26 accused was done by a “network of companies” of the Siemens Project, undertaken by the APSSDC. The fund diversion was discovered in a forensic audit.
The audit prompted the APSSDC to order a probe by the ED into the Siemens Project, which was originally designed to provide skills to engineering graduates across the state.
The probe discovered that top executives in DesignTech — an Indian company that provides engineering and product design services — and Siemens reportedly diverted ₹241 crore through various shell companies.
The ED’s report also revealed that DesignTech and Siemens utilised only ₹370.78 crore of the government’s fund, which is in violation of the original scheme proposed by the then-state government of the TDP.
The government agency also uncovered that the shell companies siphoned off the funds from the APSSDC through a bogus invoicing scheme pertaining to the Siemens Project.
Siemens Project that never was
The Siemens Project was meant to establish six Siemens clusters for skill development training, each costing ₹546.84 crore.
In 2014-2015, Siemens India Software Limited’s managing director Soumyadri Shekhar Bose and DesignTech’s managing director Vikas Khanvilkar approached the then-chief minister, Chandrababu Naidu, and proposed that the two companies would set up Centres of Excellence for skill development training in Andhra Pradesh.
They projected that the project would cost over ₹3,300 crore. Siemens and DesignTech would sponsor 90 percent of the cost of the project as grant-in aid, while the Andhra Pradesh government would have to foot only 10 percent of the cost — ₹370 crore (including taxes).
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Though GST Intelligence, Pune, flagged the alleged siphoning by the accused in 2018 itself and informed the then-government, no action was taken.
“In 2018, the GST Intelligence wing under the central government detected that DesignTech had siphoned off ₹241 crore out of the ₹370 crore received from the APSSDC. A complaint was received in 2018 itself by the state’s Anti-Corruption Bureau about this large-scale corruption after the case was initiated,” a top CID official told South First.
Moreover, important files in the Secretariat were removed and destroyed to cover the tracks of the accused in the case, the CID official added.
