New Delhi: The prosecution has produced no prima facie evidence to justify allegations of misappropriated funds being transferred to the Telugu Desam Party (TDP) accounts, the Andhra Pradesh High Court said Monday while granting bail to former chief minister Chandrababu Naidu in the alleged multi-crore skill development corporation scam.
The case pertains to alleged misappropriation of funds from the Andhra Pradesh Skill Development Corporation (APSSDC), leading to a loss of over Rs 300 crore to the state government.
“Despite allegations of transferring misappropriated amounts to the TDP account, no prima facie evidence is presented to support this claim. This court views that such serious allegations should be backed by substantial material before seeking the remand of the petitioner,” Justice T. Mallikarjuna Rao said.
The court viewed this lack of supportive material “as a gap in the investigation’s conclusion that the alleged misappropriated amount had been transferred to the TDP party’s account”.
The FIR was registered on 9 December, 2021. Naidu was arrested by the Andhra Pradesh CID on 9 September this year for his alleged involvement in the scam during his Telugu Desam Party’s regime from 20014 to 2019. The 73-year-old leader was granted four weeks of interim bail on medical grounds on 31 October.
As per the judgement, Naidu’s government, through Andhra Pradesh State Skill Development Corporation, collaborated with SIEMENS to set up skill development centers. A Memorandum of Agreement was signed between APSSDC and SIEMENS, with the understanding that SIEMENS and Design Tech will provide 90 percent of the funding, and the government will contribute the remaining. Siemens was tasked with establishing six centers of excellence.
Among other things, the prosecution contended that the funds amounting to Rs 370 crore were swindled/transferred into various shell companies from where different accused persons, including Naidu, withdrew the amount in cash.
Granting bail, the court asserted that no material was placed before it to substantiate the contention that Naidu withdrew the amount in cash.
The high court also relaxed the condition that had been imposed on the TDP chief while granting him interim bail, that he shall abstain from conducting public rallies and meetings.
It felt that “placing such conditions will have an impact on the electoral prospectus of the petitioner’s political party”. This condition is to be relaxed from 29 November, the high court said.
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‘Not CM’s duty to verify parties’ signatures’
As per media reports, the prosecution has alleged that the TDP government released Rs 371 crore in a hurry within three months of the launch of the project without Siemens investing even a single rupee. Out of this amount, the prosecution alleged that Rs 241 crore was allegedly diverted to shell companies, which provided invoices without providing any service. These companies, it further said, were used to siphon the public funds running into crores of rupees.
Before the court, the prosecution has alleged that Naidu allegedly influenced the government’s release of substantial cash amounts to specific private entities, facilitated through intermediaries. Subsequently, these entities allegedly transferred the received cash to Naidu, through various individuals, involving Naidu’s former personal secretary, his close associate and his son.
A thorough analysis of cash deposits into the mentioned accounts revealed significant amounts deposited in the TDP account. This, it said, aligned with the timeline of the alleged misappropriation of APSSDC funds and their diversion to various accused individuals.
However, the high court asserted that “it cannot be definitively concluded that the misappropriated amounts were diverted to the Telugu Desam Party’s bank accounts based solely on these observations.”
In its judgement, the court pointed out that the prosecution has not asserted that SIEMENS and Design Tech, parties to a Memorandum of Agreement (MOA) with APSSDC, failed to deliver high-end technology to trainers in collaboration with various state governments.
Among other things, the prosecution had highlighted that according to the MOA and Licence Agreement, the actual signatory for SIEMENS was Mr. Soumyadri Sekhar Bose, but Mr. Suman Bose signed the MOA. However, the court asserted that the prosecution needs to clarify how Naidu can be held responsible for such discrepancies, “as it is not his duty, as the then Chief Minister, to verify and compare parties’ signatures”.
‘Z+ security, so no flight risk’
The finance secretary raised objections, emphasizing that funds should only be released with necessary security in the form of bank guarantees, the prosecution had said. Despite objections, the chief secretary, with the CM’s endorsement, ordered the release of funds, it further told the court.
The court, however, opined that Naidu’s inclination to clear funds does not imply his involvement in the offence without evidence of funds being diverted to his or his party’s account.
It agreed with Naidu’s lawyer that he cannot be held responsible for every subcontractor’s evasion. “There is no prima facie indication that officials informed the petitioner of such deviations.”
In its judgement, the court also opined that the prosecution’s claim that Naidu indirectly influenced witnesses, co-accused, and party members “lacks substantiating material”. However, at the same time, the court was also not convinced by Naidu’s claim that the case was politically motivated as a regime revenge by the present government.
The court, therefore, granted him bail, noting that all the other accused involved in the case had been granted bail. It also noted that Naidu has been provided with Z+ security of the NSG by the central government.
“The said fact goes to show that there is no flight risk, and there is no possibility of tampering with the evidence or influencing/intimidating the witnesses. The petitioner is aged about 73 years. Considering the petitioner’s age, this court finds that it is quite probable to suffer from old age ailments,” it noted.
The high court, however, added that the observations made by it shall not be construed to be a reflection on the merits of the case.
(Edited by Tony Rai)