Days after TDP MLA's Arrest, ACB Says 12 More to be Held in Andhra's Multi-crore ESI Medical Scam

The Andhra Pradesh government's Anti Corruption Bureau (ACB) on Sunday said 12 more people accused in the multi-crore Employees State Insurance (ESI) scam would be arrested in the coming days.

The state police has arrested Telugu Desam Party (TDP) MLA and former labour minister Kinjarapu Atchanaidu, and six others so far, it said.

"In the ESI scam so far, 19 persons' (both public servants and private persons) involvement has been noticed. So far, seven of them have been arrested. The police has formed teams to arrest other accused in the coming days," a senior ACB official said.

The other accused to be arrested involve one official working in the state secretariat, officials of Employees State Insurance (ESI) hospitals and private suppliers.

According to the ACB, during the five years (2014-15 to 2018-19) of TDP rule when Atchanaidu was Labour Minister, there were several irregularities in the procurement of medicines, surgical equipment, and furniture worth Rs 988.77 crore for ESI hospitals, ESI Diagnostic Centers and ESI Dispensaries spread across the state.

The accused have violated the state government procedures and guidelines, causing Rs 155 crore loss to the state exchequer, it said.

The ACB official said that three then Directors of Insurance Medical Services (DIMS), which implements the ESI scheme, made purchases without constituting a drug procurement committee and without calling for open tenders.

They are accused of fabricating quotations from non-rate contracts, paying excess amounts without negotiating the rates.

The total budget allocation for the purchase of drugs and medicines during the tenure of three directors was Rs 293.51 crore, while purchased drugs and medicines were worth Rs 698.36 crore, the official added.

Other irregularities include that the staff of DIMS in connivance with private parties forged and fabricated the quotations with some Non-Rate Contract firms for getting purchase orders from DIMS.

The ACB official further said some of the staff of the DIMS using their official positions established benami firms in the name of their family members and got purchase orders for the supply of medicines and drugs.

Irregularities committed in assigning works of sewerage and bio medical waste disposal plants are under probe, the official added.

The ESI scheme is monitored and implemented by the Director of Insurance Medical Services (DIMS) in Andhra Pradesh.

The employers and employees of the relevant sectors contribute their share of 3.25 per cent and 0.75 per cent of their salary respectively for ESI Scheme.

The expenditure ratio between the state government and ESI Corporation is 1:7. The entire expenditure is initially met by the state government and subsequently, the ESIC reimburses its share to the state government.