Hyderabad: The Enforcement Directorate (ED) has issued notices to Bharat Rashtra Samithi (BRS) executive president and former Telangana minister KT Rama Rao in connection with the Formula E-race case, officials said.
It is mentioned in it that KT Rama Rao, popularly known as KTR, should appear before the agency on January 7. The ED has also issued notices to senior IAS officer Arvind Kumar and former HMDA chief engineer BLN Reddy.
In the notices given to Arvind and BLN Reddy, it was mentioned that they should appear before the probe agency on January 2 and 3. ED is investigating the case under the Prevention of Money Laundering Act based on an FIR filed by the Anti-Corruption Bureau (ACB).
The case, linked to the transfer of public funds to a foreign entity, stems from a First Information Report (FIR) filed by the Telangana Anti-Corruption Bureau (ACB).
The ACB named KTR as the primary accused along with Arvind Kumar, Special Chief Secretary of the Revenue Department (Disaster Management), and Reddy in its FIR. The ED filed an Enforcement Case Information Report (ECIR), focusing on violations under the Foreign Exchange Management Act (FEMA) and Prevention of Money Laundering Act (PMLA).
The controversy revolves around the Hyderabad Metropolitan Development Authority's (HMDA) transfer of Rs 45.71 crore (approximately £4.47 million) to the Formula-E Organizations (FEO) in the United Kingdom in October 2023. The funds were allegedly sent without the necessary regulatory approvals or adherence to tax deduction requirements, resulting in significant financial irregularities.
Meanwhile, in a strongly-worded counter-affidavit filed in the Telangana High Court on Friday, the ACB accused KTR of criminal misconduct in the handling of Formula-E race contracts.
The ACB alleged misuse of government funds, unauthorised payments, and violations of procedural rules under KTR's instructions.
The ACB stated that over ₹54 crore was transferred to a foreign company from HMDA funds without required approvals from the Council of Ministers or the Finance Department. This, they said, violated HMDA norms and added an unnecessary financial burden of ₹8 crore on the authority.
The counter, filed by ACB DSP Majid Ali Khan, argued that KTR's petition to quash the FIR was an attempt to obstruct the investigation. It stated that the plea lacked legal grounds and factual merit, warranting its dismissal.
According to the ACB, an agreement was signed on October 25, 2022, between Formula-E Operations Limited (FEO), the Hyderabad Municipal Corporation, and Ace Next Gen Private Limited to host the 9th, 10th, 11th, and 12th season races in Hyderabad.
However, when the promoter withdrew for the 10th season, the government assumed responsibility for organising the event and designated HMDA as the promoter.
The ACB pointed out that a second agreement was signed on October 30, 2023, during the election code of conduct. Despite this, over ₹54 crore was paid from HMDA’s funds in early October 2023, bypassing approvals from both the Election Commission (EC) and the Cabinet. The counter affidavit stated that such payments were not mandated under the agreement and directly violated election protocols.
KTR’s claim that EC permission was unnecessary for continuing the 2022 agreement was dismissed by the ACB as baseless. They noted that the first agreement, dated October 15, 2022, was cancelled on October 27, 2023, and the new agreement, signed three days later, did not justify prior payments.
The ACB emphasised that under the original agreement, the government’s role was limited to providing infrastructure and constructing the track, not making payments on behalf of the sponsor.
The ACB also refuted KTR’s assertions that the FIR was politically motivated. They explained that the FIR was registered after obtaining requisite permissions and that evidence from records indicated prima facie misconduct.
Additionally, the ACB dismissed the claim that Section 41A of the CrPC was violated, stating that the seriousness of the allegations justified the immediate filing of an FIR without a preliminary inquiry. They cited Supreme Court rulings that permit FIR registration in cases involving grave allegations without an initial investigation.
The ACB claimed the evidence collected thus far points to financial irregularities, procedural violations, and misuse of government resources under KTR’s instructions. They urged the High Court to reject KTR's petition to dismiss the case.
