ED summons K T Rama Rao on January 7 in Formula E race case

The ED is conducting an investigation under the Prevention of Money Laundering Act (PMLA) based on an FIR filed by the Telangana Police’s Anti-Corruption Bureau (ACB) in connection with alleged irregularities in bringing the Formula-E car racing event to Hyderabad in February 2023. The ED is also investigating if there were any Foreign Exchange Management Act (FEMA) violations in the transfer of Rs 45 crore to Formula-E Organisers (FOE), a foreign company.

On December 19, the ACB had filed a case against KTR, the son of former chief minister K Chandrashekar Rao (KCR), under the Prevention of Corruption Act as well as under Indian Penal Code sections 409 (criminal breach of trust) and 120B (criminal conspiracy). While KTR was named the primary accused, Kumar and Reddy were named the second and third accused, respectively.

On December 20, taking cognisance of the ACB FIR, the ED filed a money laundering case against Rao, Kumar and Reddy.

Meanwhile, after Rao filed a petition to quash the ACB FIR against him, the Telangana High Court, in an interim order, directed the ACB not to arrest him till December 30.

The Formula E race case

The Formula E race case relates to the alleged mismanagement of funds and payments made when KTR was the Telangana minister for MAUD, which had worked towards bringing the car racing event to Hyderabad in February 2023.

According to the FIR, KTR failed to get clearance from the state cabinet before authorising Arvind Kumar to make payments. The ACB has also alleged that the HMDA paid Rs 45 crore in two instalments to FOE, in violation of Reserve Bank of India (RBI) guidelines. The RBI imposed a fine of Rs 8 crore on the Telangana government, then headed by KCR, for the unauthorised transactions. The fine was paid by the Congress government after coming to power late last year, 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 conduct of the event were discovered, following which the ACB began its investigation.