Telangana’s Anti-Corruption Bureau (ACB) filed a case on Thursday against Bharat Rashtra Samithi (BRS) working president and former minister K T Rama Rao, son of former chief minister K Chandrashekar Rao, in connection with alleged irregularities in bringing the Formula E car racing event to Hyderabad in February last year.
While Rama Rao, known as KTR, was named the primary accused in the case, former Municipal Administration and Urban Development (MAUD) principal secretary Arvind Kumar was named the second accused and former Hyderabad Metropolitan Development Authority (HMDA) chief engineer BLN Reddy the third accused.
The case relates to alleged mismanagement of funds and payments made when KTR was the state’s minister for MAUD, which had worked towards bringing the Formula E race to the capital city.
As per the FIR, KTR failed to take clearance from the Cabinet before authorising Arvind Kumar to make payments.
The ACB alleged that the HMDA paid Rs 45 crore in two instalments to the foreign company, Formula E Organisers (FOE), in violation of RBI guidelines. The RBI imposed a fine of Rs 8 crore on the then Telangana government for unauthorised transactions, which was later paid by the Congress government after coming to power late last year, the FIR said. As per the FIR, when the new government investigated why the RBI had imposed the fine, the alleged violations and financial irregularities in the conduct of the Formula E race event were discovered, following which the ACB began its investigation.
The FIR was registered under the Prevention of Corruption Act as well as under IPC sections 409 (criminal breach of trust) and 120B (criminal conspiracy).
The case was filed after Governor Jishnu Dev Varma gave his consent to prosecute KTR.
On Wednesday, KTR wrote a letter to Chief Minister A Revanth Reddy, saying that the Formula E case should be discussed in the Legislative Assembly so that the people of Telangana get to know what “actually happened”.
After coming to power in December 2023, CM Revanth Reddy and several ministers of the Congress government raised allegations of corruption in the conduct of the Formula E race.
“One main allegation is that K T Rama Rao did not seek the necessary approvals from the Cabinet. The money was transferred to accounts of individuals and entities, including one foreign firm, not connected with organising the race. Telangana Assembly elections had been announced and the Model Code of Conduct was in force and the second agreement made to hold the race was done without permission of the Election Commission,” an official said.
KTR denied any irregularities in the payments made for the event. He said the decision to host the race was made to promote the image of Hyderabad globally.
Late in 2022, the Municipal Administration signed an agreement with FEO and Ace Nxt Gen Pvt Limited to host Formula E seasons 9, 10, 11, and 12. The ninth season was held in Hyderabad on February 10 and 11, 2023. As per the ACB, Ace Nxt Gen dropped out after the ninth season, but as FEO expressed willingness to go ahead with the 10th season, Arvind Kumar authorised transfers of Rs 45 crore, made in Pounds, to FEO.
The FIR states that in reply to a notice issued by the Congress government to Arvind Kumar on why the RBI imposed a fine and why Rs 45 crore was paid, he replied that he transferred the money in two instalments after receiving approval from the competent authority, i.e the then MAUD minister, KTR.
Reacting to the FIR, senior BRS leader and former minister T Harish Rao said KTR is being targeted for trying to enhance the image of Hyderabad globally.
On the allegations, KTR has previously said that nothing was done illegally in entering into agreements to hold the races. “I am willing to go to jail if anything illegal is found. I will use the jail time to stay fit and plan a padayatra,” he said.
He said that the then BRS government of Telangana convinced sponsors to hold the race in Hyderabad while competing with cities like Seoul and Cape Town. According to KTR, while a tripartite agreement between the state government, Greenko, and Ace Nxt Gen was entered into for the ninth season, Ace dropped out for the next season citing losses. On coming to know about this, KTR said, he instructed HMDA commissioner Kumar to transfer funds to the organisers while in the meantime they looked for other sponsors. “I gave the instructions as vice-president of HMDA. The HMDA operates independently and does not need approval from Finance Department or Cabinet,” he said.
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