Telangana Governor Jishnu Dev Verma on Thursday gave his nod to prosecute Bharat Rashtra Samithi (BRS) working president and Sircilla MLA K T Rama Rao in the alleged Hyderabad Formula E case.
The state’s anti-corruption bureau (ACB) had written to the Governor on September 9 to seek his permission to begin the prosecution proceedings against Rao, popularly known as KTR, in the case.
The issue was also raised by Chief Minister A Revanth Reddy during his campaigning for the recent Jubilee Hills Assembly bypoll, which the ruling Congress party won.
On November 11, Revanth Reddy had said that the file seeking the nod for prosecution “had been pending with the Governor for two months”, accusing the BJP of trying to “save” KTR.
The ACB had earlier summoned KTR in connection with the case which involves the alleged transfer of Rs 45 crore to a foreign company, Formula-E Organisers (FOE), in February 2023.
What is ACB case against KTR?
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In February 2023, when KTR was Telangana’s minister for Municipal Administration and Urban Development (MAUD) during the then BRS government led by K Chandrasekhar Rao or KCR, KTR’s father, Hyderabad hosted the Formula-E, an international electric car racing event.
On December 19, 2024, the ACB booked him in connection with alleged mismanagement of funds and irregular payments in organising the event.
The FIR was registered against him and some other accused under the Prevention of Corruption Act as well and IPC Sections 409 (criminal breach of trust) and 120B (criminal conspiracy).
According to the FIR, KTR failed to take clearance from the state Cabinet before authorising then MAUD principal secretary Arvind Kumar to pay Rs 45 crore to the FOE.
The ACB has alleged that the Hyderabad Urban Development Authority (HMDA) paid Rs 45 crore in two instalments to the 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.
This fine was paid by the Revanth Reddy-led 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 are accused in the case?
While KTR was named the primary accused in the FIR, Arvind Kumar was named the second accused and former HMDA chief engineer BLN Reddy the third one.
Kumar was Principal Secretary of MAUD from 2021 to January 2024. He was also the HMDA commissioner. He had been issued a memo by the Reddy government to explain the money transfers. In his reply, he submitted that he did so on the then minister KTR’s instructions.
The ACB is currently awaiting the DoPT clearance to prosecute Arvind Kumar. If this approval is granted, the ACB would file a charge sheet against KTR, Arvind Kumar and BLN Reddy.
What is the ED case against KTR?
On December 28, 2024, based on the ACB FIR, the Enforcement Directorate (ED) issued a summons to KTR to appear before it on January 7, 2025. 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 is BRS’ stance?
BRS leader T Harish Rao, who is also KTR’s cousin, called the case “the peak of political vendetta”. “It is despicable for the CM who holds a constitutional position, to attempt to silence questioning voices…. Revanth Reddy has made it his sole aim to fabricate illegal cases against KTR… People are noticing the petty dramas being staged to gain political advantage ahead of local body elections. Illegal cases cannot demoralise KTR or BRS leaders. BRS Party stands fully behind KTR. We will legally confront Revanth Reddy’s despicable stance,” he said in a post on X on Thursday.
What has been KTR’s position?
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.
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 the row over the 2023 Formula E event, the 2024 race was cancelled, as the MAUD, under the new government, decided not to fulfil the Host City Agreement.