Why Was Chandrababu Naidu Arrested? Andhra Pradesh Cops List Allegations

N Chandrababu Naidu, Telugu Desam Party chief and former Andhra Pradesh chief minister, masterminded a Rs 371-crore scam in the state skill development corporation, sources in the YSR Jagan Mohan Reddy government have alleged.

Mr Naidu was arrested early this morning at Nandyal, nearly 300 km from Hyderabad, following high drama. TDP supporters clashed with police personnel who reached Nandyal to take Mr Naidu in custody. He was eventually arrested and shifted to Vijayawada.

In his address to mediapersons, a senior officer of the state CID referred to Mr Naidu as the "prime accused" in connection with the alleged fraud. "This case revolves around the establishment of centres of excellence in Andhra Pradesh," N Sanjaya, Additional DGP of Andhra CID, said. 

"The Andhra Pradesh government released Rs 371 crore, a large part of which was siphoned and only a small part employed to establish the centres of excellence. Most of this money was diverted through shell companies by using fake invoices.

The investigation revealed that Mr Naidu was the "principal conspirator" in the matter and the transfer of government funds to private entities through shell companies happened under his "active leadership", the officer said.

"He possesses exclusive knowledge of the transactions leading to the issuing of government orders and the MoU which makes him the central figure of this investigation," he added.

Sources in the state government alleged that Mr Naidu "meticulously planned, directed, and executed the scam".

At the centre of the alleged scam is the Andhra Pradesh State Skill Development Corporation set up under then Chief Minister Naidu to provide job training to youngsters.

The then TDP government entered into a Memorandum of Understanding (MoU) with German engineering giant Siemens. The project was to be executed by the state skill development body in partnership with a consortium comprising Siemens, Industry Software India Ltd, and Design Tech Systems Pvt Ltd. Siemens was tasked with establishing six centres of excellence, the sources said.

This MoU, they said, laid down that Andhra Pradesh government would contribute 10 percent of the project cost of Rs 3,356 crore.

It is alleged that a whopping Rs 371 crore was disbursed in five installments within three months even though Siemens had not invested any funds into the project.

"Show me where my name is. How can they arrest me without basic evidence?" Mr Naidu said during the face-off between his supporters and cops.

Later, a post on his official X handle said, "For the past 45 years, I have selflessly served Telugu people. I am prepared to sacrifice my life to safeguard the interests of Telugu people. No force on earth can stop me from serving Telugu people, my #AndhraPradesh and my motherland."

Before he was taken away, the TDP chief asked his supporters to ensure restraint, adding, "In the end, righteousness wins."

Sources in the government alleged that no files related to the project were signed by then-principal finance secretary and then-chief secretary and this raises "questions about transparency".

They added that reports suggest that attempts were made to destroy critical documentary evidence linked to the scandal.

The sources alleged that a sum of Rs 241 crore was allegedly diverted to various shell companies, including Allied Computers, Skillers India Pvt Ltd, Knowledge Podium, Cadence Partners, and ETA Greens, without any tangible returns for skill development.

They also pointed to an Enforcement Directorate probe into the case. The ED's investigation, the sources said, found that the then Andhra Pradesh government violated established norms by releasing Rs 371 crore without a tendering process. The sources in the state government said the central agency made several arrests in the case.

TDP spokesperson Kutumba Rao has said the investigation had reportedly revealed alleged GST violations by Design Tech Systems that had entered into a contract with the state skill development corporation. This was probed by ED and it found diversion of funds to shell companies, he said. "They are wrongly trying to link Chandrababu Naidu to those violations," Mr Rao said.