The Telangana Anti Corruption Bureau (ACB) office in Hyderabad saw high drama on Monday (January 6), with Bharat Rashtra Samiti (BRS) leader K T Rama Rao, who was here to record a statement, refusing to go inside, claiming the agency was not allowing his lawyer to be present.
The ACB had summoned KTR in connection with the Formula E race case, involving the transfer of Rs 45 crore to a foreign company, Formula-E Organisers (FOE), in February 2023.
What is the Anti Corruption Bureau case against KTR?
KTR is the working president of BRS and son of BRS chief and former Telangana CM K Chandrashekar Rao. In February 2023, when he was Telangana’s minister for Municipal Administration on Urban Development, Hyderabad hosted the Formula-E race, an international electric car racing event.
On December 19, the ACB booked him in connection with alleged irregularities in the event. 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 relates to alleged mismanagement of funds and irregular payments.
According to the FIR, KTR failed to take clearance from the state cabinet before authorising former Municipal Administration and Urban Development (MAUD) principal secretary Arvind Kumar to pay Rs 45 crore to FOE.
The ACB has alleged that the Hyderabad Urban Development Authority (HMDA) paid Rs 45 crore in two instalments to FOE. 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, then headed by KTR’s father.
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This fine was paid by the Congress government after coming to power 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.
Who else is accused in the case?
While KTR was named the primary accused, Arvind Kumar was named the second accused and former HMDA chief engineer BLN Reddy the third.
Kumar was Principal Secretary of MAUD from 2021 to January 2024. He was also the commissioner of HMDA. He had been issued a memo by the A Revanth Reddy government to explain the money transfers. In his reply, he submitted that he did so on the instructions of K T Rama Rao, the then minister.
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What is the ED case against KTR?
On December 28, based on the ACB FIR, the Enforcement Directorate (ED) issued a summons to K T Rama Rao to appear before it on January 7. Arvind Kumar and BLN Reddy had been asked to appear on January 2 and 3, respectively, and they recorded their statements. The ED is conducting the investigation under the Prevention of Money Laundering Act (PMLA).
The ED is also investigating if there were any violations under Foreign Exchange Management Act (FEMA) as a transfer of Rs 45 crore to a foreign entity is involved in the case.
What has been KTR’s reaction?
KTR has publicly acknowledged that he had authorised the transactions in the interest of holding the Formula E race and building the global brand image of Hyderabad.
He has maintained that the payments were properly authorised and there were no financial irregularities in organising the race.
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Regarding the allegation that he did not seek the necessary approvals, KTR said he authorised the payments as the vice-president of the HMDA. The HMDA operates independently and does not need approval from the Finance Department or Cabinet, he said.
He had approached the Telangana High Court seeking to quash the ACB’s FIR. The HC, in an interim order, directed the state’s ACB to not arrest KTR till further orders.
What was the Formula E event?
The Hyderabad E-Prix was the first such event held in India for electric cars. After 2023, the 2024 race was cancelled, as the MAUD, post the Assembly polls last year, decided not to fulfil the Host City Agreement.
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