AP skill development scam: CID arrests former Siemens employee GVS Bhaskar from UP

Vijayawada: The Andhra Pradesh Crime Investigation Department (CID) arrested G.V.S. Bhaskar in Rs 241 crore AP State Skill Development Corporation (APSSDC) scam. This is a major arrest in the skill development corporation scam involving Siemens Industry Software India Ltd and Design Tech Systems Pvt Ltd.

Bhaskar, who was a former employee of Siemens Industrial Software Pvt Ltd, was taken into custody by the CID from his residence in Noida, Uttar Pradesh, and produced before the Court. A transit remand of 36 hours was given to produce him in the Court in Vijayawada.

APSSDC scam:

The scam dates back to 2014, when the TDP government in Andhra Pradesh entered into an MoU worth Rs 3,300 Cr, with a consortium involving Siemens Industry Software India Ltd and Design Tech Systems Pvt Ltd. The company offers training programs in collaboration with various state governments. Further, a GO was issued stating that Siemens would set up six centers of excellence for skill development worth Rs 3300 Cr.

How the scam came to light

The lid blew off in 2017, when the tax investigation wing of GST, Intelligence Pune, unearthed a financial fraud involving crores of rupees. The GST sleuths cross-checked the invoice of DesignTech Systems private limited and Skillar Enterprises India private limited, which led them to APSSDC, Vijayawada.

During the probe, CID officials found that no tenders were called for the project, and Siemens Industry Software India and Design Tech had not spent a single rupee from their resources on this project. However, they siphoned off the major portion contributed by the Government of Andhra Pradesh as its share for 10% of the project cost, amounting to Rs 371 Cr. The money was diverted to major shell companies.

Based on the complaint of K. Ajay Reddy, Chairman, APSSDC, the CID registered a case under Sections 166, 167, 418, 420, 465, 468, 409, 201, 109, r/w 120 (B) of the IPC and Sections 13(2) r/w 13(1)(c) and (d) of the Prevention of Corruption Act, 1988 accusing the role of 26 persons, including some government officials in the scam. According to the complainant, the public funds were swindled by shell companies. The accused raised fake invoices and cheated the government to the tune of Rs 241 Crore.

Two key persons, Ganta Subbarao, former MD & CEO of the Corporation, and Dr. K Lakshmi Narayana, a retired IAS officer who held the position of Director of the Corporation, have been named by CID in the scam.

Role of Bhaskar in the scam:

According to the CID officials, Bhaskar has been involved in the manipulation of the estimates/valuation, and preparation of a project report with the other co-accused. They artificially inflated the valuation of the Siemens skill development Program to Rs 3300 crore.

This created an obligation of Rs 371 crore on the Government of Andhra Pradesh, as it had to pay 10% of whatever was the cost of the project. Though the cost of the software supplied by Siemens Industrial Software Pvt Ltd was invoiced at just Rs 58 crores (without any discount), Bhaskar manipulated the estimates of the project to reach the figure of Rs 3300 crore.

Manipulation of MoU:

The government orders regarding the Siemens Skill development programme envisaged that the technology partners would contribute 90% of the project's cost. However, Bhaskar and the other co-accused conspired with the government officials to manipulate the MoU.

Role of his wife:

As soon as the negotiations began between the Technology partners and the AP government regarding the implementation of the skill development programme, Bhaskar colluded with Ghanta Subba Rao, who was the MD & CEO of APSSDC to get his wife Aparna (IAS 2001 batch, UP cadre) on inter cadre deputation to Andhra Pradesh. Aparna was then given a key role in the APSSDC as the deputy CEO of APSSDC. The couple did not report this conflict of interest to the government at any stage of the implementation of the project.

Manipulation of the valuation of the project:

As a precondition for the release of the funds to the technology partners, when the officials of the APSSDC sought an evaluation of the project by a third party, Bhaskar reached out to the officials of the Central Institute of tools design (CITD) and managed to manipulate the report given by the organization in favor of the co-accused and himself.

Association with the shell companies:

Bhaskar moved to M/s Aptus Health care from Siemens, and this company was identified by the Central tax authorities as a shell company formed to siphon off funds in collusion with M/s Designtech, M/s Skillar.

Arja Srikanth issued notice

Two days before, CID also served notices to Arja Srikanth, a former Indian Railway Traffic Service (IRTS) officer, who was MD & CEO, APSSDC in 2016. According to the CID sources, the investigative agency would send out notices to other connected officials in the case.