New Delhi On October 15, 2024, the Enforcement Directorate (ED) in Hyderabad provisionally attached properties worth Rs. 23.54 crore linked to executives of Siemens Industry Software and DesignTech Systems.
This action is part of the Andhra Pradesh State Skill Development Corporation (APSSDC) scam, the same case that led to Andhra Pradesh Chief Minister N. Chandrababu Naidu’s 53-day imprisonment in 2023 (he was in the opposition at the time, after his party lost the Andhra Pradesh assembly elections in 2019).
The ED has neither confirmed nor denied Naidu’s involvement in the alleged Rs. 371 crore misappropriation of public funds. Despite this, several media outlets, including senior journalists, have prematurely claimed his exoneration without an official statement from the agency.
This move by the ED, however, aligns with what critics call the BJP’s “washing machine” strategy, according to which, leaders facing cases from central agencies often see their cases go into cold storage upon joining the NDA, effectively shielding them from the full force of the law.
Naidu, who is the incumbent Chief Minister of Andhra Pradesh after his Telugu Desam Party (TDP) won a landslide victory in the 2024 assembly elections, is presently an ally of the BJP-led National Democratic Alliance (NDA) government in the Centre.
What ED said
In its October 15, 2024, press release, the Enforcement Directorate (ED) confirmed the provisional attachment of properties worth Rs. 23.54 crore. However, it did not mention Naidu by name or suggest that the investigation had reached any final conclusions about his role.
The properties, linked to executives of Siemens Industry Software and DesignTech Systems, were seized under the Prevention of Money Laundering Act (PMLA), 2002, as part of the ongoing probe into the alleged misappropriation of government funds earmarked for a state-run skill development initiative.
The APSSDC project, launched between 2014 and 2019 during Naidu’s administration, aimed to promote skill development and entrepreneurship across Andhra Pradesh. However, the Rs. 371 crore fund allocated to this initiative became the focus of scrutiny when reports surfaced that the money had been syphoned off through a network of shell companies.
Investigators allege that executives at Siemens and DesignTech, along with other key individuals, diverted the funds under the pretence of providing materials and services that were never delivered.
Naidu finds no mention in ED’s press release
In the wake of the ED’s property attachment, a flurry of media reports erroneously suggested that Chandrababu Naidu had received a “clean chit” from the investigating agency. Many interpreted the ED’s silence on Naidu’s involvement as a sign of his exoneration, without due diligence.
However, a careful examination of the ED’s official press release would have revealed that the agency made no explicit mention of Naidu’s involvement at this stage of the investigation, nor did it indicate that the probe had concluded.
At most, one could infer that Naidu has found temporary reprieve, given his current alliance with the NDA – though this situation could change if the alliance dissolves.
TDP’s muted response and alleged diversionary tactics
In stark contrast to the media frenzy surrounding Naidu’s alleged exoneration, the TDP has maintained a surprisingly muted response. Although party spokespersons have occasionally asserted Naidu’s innocence, there’s been a conspicuous absence of celebratory press conferences or triumphant public declarations of vindication.
This restraint is particularly noteworthy given Naidu’s reputation as a media-savvy politician – one who typically seizes opportunities to capitalise on political victories and leverage the press to shape his public image.
One possible explanation for this muted response is the fact that the ED has not formally cleared Naidu. Any overt celebration or declaration of innocence could backfire if further evidence surfaces or if the investigation takes a new turn.
Meanwhile, Sajjala Ramakrishna Reddy, a senior YSRCP leader, faces a look-out circular for his alleged involvement in the 2021 ransacking of the TDP central office near Mangalagiri. Reddy vehemently denied these allegations, framing them as part of a broader campaign of political vengeance orchestrated by the opposition. He questions the timing and intent behind the accusations, suggesting that the TDP may be attempting to regain control of the political narrative and divert public attention from the skill development scam.
BJP’s ‘washing machine’?
Naidu’s case is far from unique. Over the past decade, critics have accused the BJP and its central leadership under Prime Minister Narendra Modi of using investigative agencies like the ED, CBI, and the Income Tax Department as tools to exert political influence. This strategy, they argue, is designed to coerce opposition leaders into either aligning with the BJP or facing relentless legal challenges.
The pattern is well-documented. Several high-profile leaders from various opposition parties – including the Congress, NCP, and TMC – have seen investigations against them either slow down or cease altogether after they joined the BJP or expressed support for the ruling party.
Notable examples include former Maharashtra Chief Minister Ashok Chavan, a key accused in the Adarsh Cooperative Housing Society scam. After joining the BJP, his trial was stayed. Similarly, Ajit Pawar, the deputy chief minister of Maharashtra and a member of the NCP, saw investigations into his alleged role in a multi-crore cooperative bank scam fizzle out after allying with the BJP.
In Andhra Pradesh, TDP leaders C.M. Ramesh and Sujana Chowdary were under scrutiny by the Income Tax Department, CBI, and Enforcement Directorate before defecting to the BJP in 2019. Ramesh, currently a BJP Lok Sabha member from Anakapalli, was implicated during the power struggle between then-CBI Director Alok Verma and Special Director Rakesh Asthana. Additionally, the Income Tax Department investigated a company allegedly linked to him. Chowdary, meanwhile, faced CBI and ED probes in an alleged bank loan fraud case.
Ironically, BJP MP and spokesperson G.V.L. Narasimha Rao had dubbed Chowdary and Ramesh “Andhra Mallyas” and petitioned the Rajya Sabha Ethics Committee to take “suitable action” against them.
Even former Chief Minister of Andhra Pradesh Y.S. Jagan Mohan Reddy, indicted in a disproportionate assets case by the ED, has seen his case allegedly put on hold. Critics argue this is due to his status as an “unofficial” ally of the NDA.
It might not be over for Naidu yet
While many observers in New Delhi believe Naidu to be a kingmaker who could rein in Modi, the reality seems to be quite different. Naidu heavily depends on central funding for his dream capital Amaravati and the completion of the long-awaited Polavaram project – both requiring thousands of crores of rupees.
Additionally, Naidu’s welfare promises, “Super Six,” demand a yearly budget outlay of 1.2 lakh crore rupees. If Naidu’s repeated claims that the previous government has ruined the state’s finances and plunged it into deep debt are true, it is Naidu who needs Modi, not the other way around.
The BJP is already making inroads into Andhra, communally polarising the Tirupati Laddoo issue thanks to their belligerent ally and deputy chief minister Pawan Kalyan, who’s stealing the spotlight. This shift could cause the narrative to slip from Naidu’s grasp, forcing him to reckon with the alliance and its future.
By keeping the investigation open but dormant, the BJP may maintain control over Naidu and the TDP, wielding the threat of renewed legal action as a tool to ensure cooperation. For Naidu, this precarious balance offers both protection and peril.
While his alliance with the BJP may shield him from immediate legal consequences, the lingering uncertainty of the ED investigation leaves him vulnerable to future political manoeuvring. It seems Naidu finds himself in yet another Catch-22 situation.
