Full details on ESI Scam in which TDP MLA Atchannaidu is arrested

Amaravati: The Anti Corruption Bureau sleuths, after probing into the Rs 975.79 cr worth allegations have unearthed various violations including fabricated quotations, purchase of drugs, lab kits, surgical items, furniture and other services, in which then Minister and TDP sitting MLA Kinjarapu Atchannaidu was arrested on Friday.

Apart from Atchannaidu, all the three Directors including Dr B Ravi Kumar, Dr CK Ramesh Kumar and Dr G Vijaya Kumar worked for Insurance Medical Services in AP for the fast five years, during the tenure of the TDP government from 2014 to 2019, were also named as accused in this scam. Apart from them, the ACB officials have made other employees working in the Directorate of Insurance Medical Services (DIMS).

The ACB primarily concluded that by violating the GO Ms No 51, Dt April 4, 2012 and guidelines issued by the ESI Corporation, the procurement took place and there by caused huge loss to the public exchequer. The previous government did not constitute Drug Procurement Committee and did not call for open tenders.

When the ACB verified the records related to Non-Rate Contract firms, most of the quotations were found fabricated and the writings on the envelop covers of the quotations were similar to the hand writings of the staff of the DIMS. Dhana Lakshmi, pharmacist and E Ramesh Babu Senior Assistant of DIMS reportedly admitted that they fabricated the quotations. Based on the fabricated quotations, the Directors issued purchase orders for procurement of drugs, medicines, surgical items, lab kits, lab equipment and other furniture. In order to avoid the competitive bidding, they indulged in this violation, according to the ACB sleuths.

Even though, only Rs 293.51 cr budget was allocated, the three directors procured Rs 698.36 cr drugs and medicines by violating budget provisions and procedural guidelines. It was found that excess amount of around 132 percent spent on purchasing drugs from Non-Rate Contract. By spending at least excess amount of Rs 51.02 cr, the three Directors purchased Rs 89.58 cr worth drugs, which actually cost only Rs 38.56 cr as per the ESIC- Rate Contract, revealed the ACB officials.

Dhana Lakshmi, Pharmacist at Central Drug Store of DIMS influenced the Directors Ramesh Kumar and Vijaya Kumar to issue purchased orders for supply of drugs worth Rs 9.5 Cr from Jercon Enterprises. The Jercon Enterprises, a Non Rate Contract firm belongs to Ravilla Ravi Tejaswi, daughter in law of Dhana Lakshmi.

Ravi Kumar procured Rs 2.45 cr worth lab equipment from a single Non Rate Contract firm Legend Enterprises on nomination basis without calling tenders.

Ramesh Kumar purchased Rs 5.71 cr worth drugs from SKP Enterprises, Vizianagaram and Sri Seetharam Pharmaceuticals, Narasaraopet without calling open tenders.

The Directors purchased lab kits worth Rs 237 cr from only three Non-Proprietary firms including Legend Enterprises, Avantaor Performances India Pvt Ltd and Omni Medi on nomination basis by deviating ESI guidelines.

A Rs 47.77 cr worth surgical items procured without calling for open bid at exorbitant rates and another Rs 8.06 surgical items without indents, it was found.

By paying at least 70 percent excess on market value, the Directors purchased Rs 6.62 cr worth furniture without calling for open tenders, it was alleged.

The directors made payments to the non rate contract firms by keeping pending bills of rate contract firms from 2012, which discouraged the Rate Contract firms.

The violations found even Telemedicine services, sewerage treatment plants in ESI hospitals, biometric devices procurement. A biometric device worth just Rs 16,992 was purchased by paying Rs 70,670. Ramesh Kumar purchased at least 100 such biometric devices from Prodigy Computers and Laptops, Hyderabad.