T’gana Guv grants nod for prosecution of KTR in formula-e case

Telangana governor permits prosecution of KTR over alleged ₹54.88 crore misappropriation in the 2023 Formula E race, amid claims of political vendetta.

Telangana governor Jishnu Dev Varma on Thursday granted permission to the state government to proceed with prosecution and custodial questioning of Bharat Rashtra Samithi working president and former minister K T Rama Rao (KTR) in the alleged misappropriation of funds related to the Formula E race held in Hyderabad in 2022, people familiar with the matter said.

An official privy to the matter said the ACB was now preparing to formally register charges against KTR and was expected to file a charge sheet soon. (X)

An official privy to the matter said the ACB was now preparing to formally register charges against KTR and was expected to file a chargesheet soon after completing the interrogation. The BRS leader was questioned twice in the past – first in January and then in June, in connection with the case.

According to the Anti-Corruption Bureau (ACB), irregularities amounting to ₹54.88 crore were detected in the conduct of the 2023 Formula E electric car racing event.

The state government wrote to the governor on September 9, seeking permission to prosecute KTR, citing evidence of his alleged role in financial decisions surrounding the event. “The governor, however, had been sitting over the file for more than two months, and now, issued formal orders allowing the ACB to proceed,” the official quoted above said.

Earlier, chief minister A Revanth Reddy said the Raj Bhavan was delaying the process for its own reasons.

He addeddthat as per the amended Prevention of Corruption Act, the governor’s permission was mandatory both before investigation and before filing a chargesheet. “We sought permission three months ago. Without it, even if KTR is arrested, he will get bail within minutes,” he said.

The governor’s approval now removes the legal barrier for the ACB to advance the case.

While KTR did not react to the report that the governor had given permission to prosecute him, his cousin and former minister T Harish Rao termed it as a case of “political vendetta” against KTR.

“The government is trying to silence opposition voices and chief minister A Revanth Reddy is harassing opposition leaders for political benefit ahead of the panchayat elections,” he said, adding that the Congress government was playing petty dramas for political gain.

Union minister of state for home affairs and former Telangana Bharatiya Janata Party president Bandi Sanjay welcomed the governor granting permission to prosecute KTR.

“Till the recent by-elections to Jubilee Hills assembly seat, the chief minister used to allege that the BJP was protecting the BRS leader. Now that the governor has given the permission, let us see what Revanth Reddy will say now,” Sanjay said.

On December 19, 2024, the ACB registered an FIR under Section 13 (1) (a), read with 13 (2) of the Prevention of Corruption Act, besides Section 409 (criminal breach of trust) and 120-B (criminal conspiracy) of the Indian Penal Code, over alleged financial irregularities of ₹54.88 crore in the conduct of Formula E racing in Hyderabad,

While KTR was named as accused no. 1 (A-1), senior IAS officer Arvind Kumar was named A-2 and retired chief engineer of Hyderabad Metropolitan Development Authority (HMDA) B L N Reddy as A-3, as per the FIR.

It said the previous BRS government had entered into a tripartite agreement with UK-based organisation Formula-E Operations Ltd (FEO) and Ace Nxt Gen Private Limited, the sponsor of the event in Hyderabad for conducting Formula E races for Seasons 9, 10, 11 and 12 in Hyderabad.

As per the agreement, the state government would build the track for the event and provide other civic amenities. The Season 9 of the Formula-E race was conducted on February 11, 2023.

Meanwhile, the sponsor backed out from the conduct of the racing event for Season 10 due to some differences with the FEO. As per the agreement, part fee payment was overdue to FEO by May 2023. Following discussions between the FEO representatives and the Municipal Administration and Urbal Development (MAUD) authorities on September 27, 2023, it was decided to make HMDA as the promoter and host of the event and pay the fee.

As per the discussions with the FEO, the HMDA was supposed to release ₹160 crore, including payment of ₹110 crore to the FEO. “The file was signed by KTR, who was then minister for MAUD,” the FIR said.

Subsequently, the organisers had submitted two separate invoices, one on September 25, 2023 for ₹22.69 crore towards first instalment and another on October 10, 2023 for ₹23.01 crore towards second instalment for conducting the Season 10 of the Formula-E race on February 10, 2024.

“The payments were made through proceedings issued by then HMDA chief engineer B L N Reddy. The amounts were transferred to FEO on a single day,” the FIR said.

It said though foreign remittances were made, no formal approvals of the relevant regulatory authorities were obtained before transferring the huge amounts. The foreign remittances resulted in additional tax burden of ₹8.06 crore to the HMDA.

The HMDA had also released ₹1.10 crore to the Federation of Motor Sports Clubs of India towards FIA inscription, interstate championship calendar fee and permit fee. “The total amount thus far paid by the HMDA was ₹54.88 crore from its general funds,” the FIR said.

As per the rules, the HMDA has to take administrative approval from the state government for any expenditure of more than ₹10 crore. The government accords such sanction in concurrence with the Finance Department. “In this case, no such procedure was followed,” the FIR said.

The ACB authorities noted that the payments to the FEO were made much before the new agreement was signed with the government as the promoter and host on October 30. Under this new agreement, the state government took the responsibility of not only paying the sponsor fee of ₹90 crore but also the burden of providing civic and logistic support in the form of laying the track for the event, and other projects.

The FIR pointed out that the schedule for the state legislative assembly elections was announced and the Model Code of Conduct came into effect from October 9, which continued till December 4.

“The new agreement with the FEO was signed while the MCC was in force and no prior approval of Election Commission of India was obtained for making the payments during the relevant period by HMDA,” the FIR said, adding that though the HMDA was not a party to the agreement, the HMDA made the payments.

It said payments were made in foreign currency in violation of existing rules and regulations related to foreign exchange remittances.