The allegations involve the transfer of ₹55 crore (USD 6.7 million) to a foreign company for the Formula E race, allegedly without necessary clearances from the Finance Department and the Reserve Bank of India (RBI)
Published Dec 19, 2024 | 6:04 PM ⚊ Updated Dec 19, 2024 | 7:44 PM
ED summons KTR for questioning in Formula E race case on 7 January
The Telangana Anti-Corruption Bureau (ACB) has registered an FIR against BRS leader and former minister KT Rama Rao (KTR) in connection with alleged irregularities during the Formula E race held in Hyderabad in February 2023.
KTR has been named as Accused No. 1 (A-1) in the case, while Aravind Kumar, a senior official, has been listed as Accused No. 2 (A-2). The HMDA Chief Engineer, BLN Reddy, has also been named as Accused No. 3 (A-3).
The allegations center around the transfer of ₹55 crore (approximately USD 6.7 million) to a foreign company for conducting the Formula E race without the required clearances from the Finance Department and the Reserve Bank of India (RBI).
The funds, which were allegedly transferred by the Hyderabad Metropolitan Development Authority (HMDA), are now under scrutiny as part of the ACB’s investigation.
The controversy has sparked political tensions, with BRS leaders, including T Harish Rao, calling the case “illegal.” Harish Rao accused the ruling government of targeting the opposition through fabricated cases. “Whenever BRS raises questions, cases are being foisted on us,” he said, challenging the government’s motives.
In response to the controversy, Telangana Governor Jishnu Dev Varma gave the state government clearance to probe the irregularities. The Governor’s consent came about a month after the state requested approval for the investigation.
The ACB is expected to issue notices to the accused for questioning, with a focus on investigating whether the ₹55 crore payment was part of a diversion of funds. The ACB will also probe the financial trail to determine if there are any corruption-related aspects to the transaction.
According to the FIR, the central allegations revolve around the transfer of ₹55 crore (approximately USD 6.7 million) to Formula E Operations Limited (FEO) for the race event, allegedly without obtaining the required approvals from the Finance Department and the Reserve Bank of India (RBI). The payments, made by the Hyderabad Metropolitan Development Authority (HMDA), were reportedly executed before a new agreement with FEO was finalised, raising concerns over procedural violations.
The initial agreement, signed on October 25, 2022, outlined that the Telangana government would be responsible for constructing the race track and providing civic amenities, but the government was not supposed to pay the sponsorship fees. However, the agreement was later modified in October 2023, making the government responsible for paying ₹90 crore (GBP 9 million) in sponsor fees.
Payments without Authorisation:
Payments were made by HMDA without prior approval from the Finance Department or relevant authorities.
No formal approval was obtained before making the foreign remittances to FEO, violating existing financial regulations.
Model Code of Conduct (MCC) Violation:
The payments were made during the enforcement of the Model Code of Conduct for the Telangana State Legislative Assembly elections (from October 9 to December 4, 2023), without obtaining approval from the Election Commission of India (ECI).
Irregular Agreement Execution:
The agreement dated October 30, 2023, which committed the state to cover additional costs, was signed without proper authorisation from the government and outside of the established procedure.
The agreement, which includes a ₹600 crore financial commitment, was executed without obtaining clearance from the Finance Department or the Council of Ministers, in violation of state guidelines.
Fraud and Financial Mismanagement:
The ACB investigation suggests that the public servants involved acted with fraudulent intent, misappropriating government funds and causing wrongful gains to third parties.
Payments were made even before the new agreement was finalised, and foreign currency remittances were processed without necessary approvals.
KTR wrote an open letter to Chief Minister Revanth Reddy, challenging him to initiate a discussion in the State Assembly regarding the controversial Formula-E race issue.
In his letter, KTR accused the Congress-led government of making baseless allegations against the previous BRS government, particularly targeting him, over the Formula-E race event.
KTR pointed out that the issue had been discussed extensively in a recent Cabinet meeting under Revanth Reddy’s leadership and that leaks from the chief minister’s Office hinted at potential legal action, citing approval from the Governor.
He refuted the allegations of irregularities and corruption surrounding the event, describing the agreement as transparent. KTR claimed that the Congress government’s attempts to discredit the event were driven by political vendetta.
(Edited by Ananya Rao with inputs from Raj Rayasam)
