Hyderabad: Former chief engineer of the Hyderabad Metropolitan Development Authority, BLN Reddy, is believed to have told the Enforcement Directorate (ED) that he transferred funds based on instructions from the then principal secretary of municipal administration and urban development (MA&UD), Arvind Kumar.
On Wednesday, ED’s Hyderabad unit recorded Reddy’s statement in connection with the Prevention of Money Laundering Act case, investigating irregularities related to the Formula E race event.
Reddy arrived at the ED office at 10 am and was questioned till 5.30 p.m.
During the interrogation, officials sought clarification on the reasons behind the transfers and the authorisation for them. Reddy confirmed that the transactions were executed in accordance with directions from Arvind Kumar.
The investigation focused on payments exceeding 54 crore from HMDA’s general funds to Formula E Operations Limited (FEO), a UK-based entity, for organising the Formula E race.
Despite HMDA not being a signatory to the tripartite agreement signed in Oct 2022 between FEO, the MA&UD department, and Ace Nxt Gen Private Ltd, the HMDA assumed the financial responsibility for season 10 of the event.
In Oct 2023, Reddy sanctioned payments amounting to 54.8 crore in two instalments. These funds were transferred to FEO’s UK account via Indian Overseas Bank’s Himayatnagar branch, bypassing the necessary regulatory approvals. This resulted in the HMDA incurring an additional withholding tax liability of 8.06 crore.
The ED’s case under PMLA is based on an FIR filed by the Anti Corruption Bureau, which is investigating alleged procedural and financial irregularities associated with the event.
