Formula E case: Guv nod for ACB to prosecute KTR

Hyderabad: In a major development, Telangana Governor Jishnu Dev Verma has approved the Anti-Corruption Bureau's request to allow it to prosecute Bharat Rashtra Samithi working president and former MA & UD minister K T Rama Rao in the Formula E race case involving alleged irregular payments of Rs 55 crore.

Initially, the ACB would prosecute KTR and proceed with a charge-sheet next week. The Enforcement Directorate (ED), which is probing the case under the Foreign Exchange Management Act (FEMA), would also resume investigation soon.

The state’s Anti-Corruption Bureau (ACB) wrote to the Governor on September 9, seeking his permission to begin the prosecution proceedings against the former minister in the Formula E race case.

The ACB had earlier summoned KTR in connection with the case, which involves the alleged transfer of Rs 45 crore to a foreign company, Formula E Holdings Limited, the organizer of Formula E race, in February 2023.

On December 19, 2024, the ACB booked case against him in connection with alleged mismanagement of funds and irregular payments in organising the event. The related FIR was filed against him and some other accused under the Prevention of Corruption Act as well as IPC sections 409 (criminal breach of trust) and 120 B (criminal conspiracy).

While KTR was named the primary accused (A1) in the FIR, former MA & UD secretary Arvind Kumar was named the second accused and former Hyderabad Metropolitan Development Authority (HMDA) chief engineer BLN Reddy the third one.

Kumar was Principal Secretary of MA & UD from 2021 to January 2024. He was also the HMDA Commissioner. He had been issued a memo by the Revanth Reddy government to explain the money transfers. In his reply, Kumar submitted that he did so on the instructions of then MA & UD minister KTR.

In February 2023, when KTR was Telangana’s Minister for MA& UD, during the then BRS government led by K Chandrashekar Rao or KCR (KTR’s father), Hyderabad hosted the Formula E, an international electric car racing event.

According to the FIR, KTR failed to take clearance from the state Cabinet before authorising then MA & UD principal secretary Arvind Kumar to pay Rs 45 crore to the Formula E Holdings.

The ACB has alleged that the HMDA paid Rs 45 crore in two instalments to the Formula E Holdings. The money transfers, in British pounds, violated the rules of the Reserve Bank of India (RBI), which imposed a fine of Rs 8 crore on the Telangana government. This fine was paid by the Revanth Reddy-led Congress government, which took over in December 2023, the FIR said.

According to the FIR, when the new government investigated why the RBI had imposed the fine, the alleged violations and financial irregularities in the racing event were discovered.

The ACB is awaiting clearance by the Union DoPT to prosecute Arvind Kumar. If this approval is granted, the ACB would file a charge-sheet against KTR, Arvind Kumar and BLN Reddy.

On December 28, 2024, based on the ACB FIR, the Enforcement Directorate (ED) issued a summons to KTR to appear before it on January 7, 2025. Arvind Kumar and BLN Reddy had been asked to appear on January 2 and 3, respectively, and they recorded their statements.