The multi-crore skill development centres probe, which led to the arrest of TDP chief and former Andhra Pradesh CM Nara Chandrababu Naidu on Saturday was haunting the leader for two years, after his party lost power in 2019 Assembly polls.

The case involved alleged misappropriation of funds while setting up a centre of excellence and five technical skill development centres between 2015 and 2019 during Naidu’s tenure as Chief Minister.

The state government had entered into an agreement with Siemens Industrial Software India and Design Tech Systems for setting up the skill development centres.

The private entities were to contribute 90 per cent of the funds for setting up the centres and running skill development programmes with the remaining 10 per cent coming from the state government.

Post 2019, a CID probe was initiated by the YSRCP government into the role of the private companies and the previous government in the setting up of these centres.

The CID probe found that the private entities allegedly did not spend their share of the cost while the state government’s share of 10 per cent — amounting to about Rs 371 crore — was allegedly misappropriated, according to the CID statement in March while prosecuting a former employee of Siemens Industrial Software.

According to investigators, GVS Bhaskar, the former employee of Siemens Industrial Software, had allegedly prepared a fake detailed project report (DPR) with overvaluation, keeping a margin of more than Rs 200 crore out of the Rs 371 crore released by the state government.

According to investigators, he allegedly inflated the valuation of the project, which involved Siemens Industrial Software India and Design Tech Systems, to Rs 3,300 crore.

However, the actual cost to Siemens Industrial Software India’s software was only Rs 58 crore, officials said.

Suman Bose, the then MD of Siemens Industrial Software India, and Design Tech Systems MD Vikas Vinayak Khanvelkar allegedly met the then chief minister Naidu for the project in 2014-15.

It was alleged that former special secretary to the state government Ganta Subba Rao and former IAS officer K. Lakshminarayana played key roles in the programme. The Crime Investigation Department (CID) identified Lakshminarayana as a close associate of Naidu.

CID officials claimed that the misappropriated money was funnelled into shell companies such as Allied Computers (Rs 60 crore), Skillers India, Knowledge Podium, Cadence Partners and ETA Greens.

According to reports, former finance secretary K Sunitha had objected to the release of funds but senior government officials overruled her.

When the CID contacted the German headquarters of Siemens, the company is said to have clarified that Bose, former managing director of Siemens Industrial Software India, had acted on his own volition, resulting in his services being terminated.

Naidu has been arrested under relevant IPC sections, including Sections 120B (criminal conspiracy), 420 (cheating and dishonestly inducing delivery of property) and 465 (forgery).

The Andhra Pradesh CID has also invoked the Prevention of Corruption Act against him.

Earlier, the Enforcement Directorate had arrested former Siemens Industrial Software India’s managing director Bose and Khanvelkar, managing director of Design Tech systems in March for alleged money laundering, diversion and misutilisation of funds, which is linked to the skill development case.

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