405 crore scam unearthed in AP ESIC


The Vigilance and Enforcement Department of Andhra Pradesh has unearthed a Rs 404.86 crore scam in the Employees State Insurance Corporation (ESIC).


It is said that this scam is an extension of the Rs 2000 crore scam unearthed last year in Telangana in which over 7 persons were jailed including the Director of the IMS Dr Devika Rani.

According to a report released by AP Director-General Dr KV Rajendranath Reddy, gross irregularities were committed in the purchase of drugs, medicines, lab kits, surgical items and furniture between 2014-15 and 2018-19, causing a huge loss of Rs 151 crore to the state exchequer.

The total scam of purchases was worth Rs 975.79 crore that took place during the period between 2014 and 2019 when the Telugu Desam Party was in power during which Rs 293.51 crore were allocated for the purchases of drugs and medicines. But to utter surprise, they made purchases worth Rs 698.36 crore, an excess of Rs 404.86 crore, in violation of all procedural guidelines, the report said.

Of this, Rs 51 crore was found to be paid in excess as the drugs were purchased from non-rate contract firms, in clear violation of guidelines. An excess of Rs 85.32 crore was paid to three private firms on purchase of laboratory kits and another Rs 10.43 crore on surgical items, it said besides furniture worth Rs 6.62 crore was also purchased without calling for open tenders.

The purchases were made at 70 per cent excess than the market prices, the report said adding “This caused a loss of Rs 4.63 crore to the government”. It has further indicted 3 persons working as directors of the Insurance Medical Services (IMS) and were identified as B Ravi Kumar, CK Ramesh Kumar and G Vijay Kumar. At least 5 other joint directors and other staff members were also said to have involved in the multicrore scam.

Keeping the Telangana experience in view, the value of the scam is expected to increase as the investigation progresses.

Meanwhile, the State labour minister G Jayaram indicated that the former labour Minister Atchannaidu and other top officials of the department would be brought to book and the swindled amount would be recovered. “We will not hesitate to send them to jail,” Jayaram said in a statement here.

This created a flutter among Telugu Desam Party as Atchannaidu is currently the deputy leader of the Telugu Desam Legislature Party. While denying allegations, he said he had merely implemented the directives of Prime Minister Narendra Modi who wanted all states to introduce TeleHealth Services. He also declared that he would face any inquiry as all relevant records are available and can be verified.