BRS Leader KT Rama Rao accused of irregularities in Formula E Event payment

The Anti-Corruption Bureau (ACB) in Telangana has registered a case against Bharat Rashtra Samithi (BRS) leader and former state minister KT Rama Rao. The allegations involve irregularities in the payment process for the Formula E car racing event held in Hyderabad in February 2023, according to a report by The Indian Express.

Alongside Rao, the FIR names Aravind Kumar, the former Municipal Administration and Urban Development (MAUD) principal secretary, and BLN Reddy, the chief engineer of the Hyderabad Metropolitan Development Authority (HMDA) at the time.

The complaint was filed by the current MAUD Principal Secretary, M Dana Kishore, on Wednesday, reported The Hindu. Kishore alleged that a payment of Rs 54.88 crore was made to Formula E Operations Limited and others in “gross violation of established procedures” while Rao held the MAUD minister position.

KT Rama Rao, son of former Chief Minister K Chandrashekar Rao, has denied any wrongdoing regarding the payments for the event.

On Friday, the Telangana High Court granted interim relief to Rao, ordering that he cannot be arrested until December 30.

According to the FIR, the MAUD department had an agreement with UK-based Formula E Operations Limited and India-based Ace Nxt Gen Private Limited to host the Formula E races for seasons 9 to 12 in Hyderabad. Season 9 took place on February 11, 2023, costing the Telangana government Rs 12 crore.

However, Ace Nxt Gen Private Limited withdrew from the agreement before season 10. Discussions were held for the state government to sponsor the event. Formula E Operations Limited then submitted two invoices to the government, totaling Rs 45.7 crore, which were approved and paid in early October 2023.

The ACB claims these payments were made without proper authorization from relevant authorities and resulted in an additional tax burden of Rs 8.06 crore for the HMDA. Furthermore, Rs 1.10 crore was paid to the Federation of Motor Sports Clubs of India, bringing the total expenditure to Rs 54.88 crore.

The FIR states that administrative sanction for expenditures over Rs 10 crore should be obtained from the government with finance department concurrence, which was not followed in this case. Payments were made despite Formula E Operations Limited terminating the agreement on October 27, 2023.

A new agreement was signed on October 20, 2023, between Formula E Operations Limited and the MAUD department, allegedly violating the Model Code of Conduct imposed in Telangana on October 9 ahead of the Assembly elections.

Rao has previously stated that he would accept jail time if any illegal activities were found. He explained that he instructed the funds transfer to Formula E Operations Limited while seeking other sponsors, emphasizing that the HMDA operates independently and doesn't require finance department or Cabinet approval.