Hyderabad's Formula E Race: Case filed against KT Rama Rao for alleged fraud

Telangana's Anti-Corruption Bureau has registered a case against KT Rama Rao, former minister and son of BRS Supremo K Chandrasekhar Rao (KCR), for alleged misuse of government funds in the Formula 1 Race organised in Hyderabad in 2023. The case was booked under Sections 13(1)(A) and 13(2) of the Prevention of Corruption Act, along with Sections 409 and 120(B) of the BNS.

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It is alleged that ₹50 crore was paid by Hyderabad Metropolitan Development Authority (HMDA) to the foreign company, FEO, in violation of RBI guidelines. According to the police, the money was transferred to the foreign entity without approval from the board of HMDA or finance department. The RBI had imposed a fine of Rs. 8 crore on the then Telangana government for unauthorized transactions, which the Congress government later paid after coming to power.

While KTR has been named the primary accused, former Municipal Administration and Urban Development (MAUD) principal secretary Arvind Kumar is the second accused.

Formula E Championship

In February 2023, Hyderabad hosted the prestigious race around Hussainsagar Lake. A new track was laid for the event that encircles the NTR Gardens. The event called Formula E Championship, with electrically powered vehicles, was recognised by the Fédération Internationale de l’Automobile (FIA) for open-wheel racing cars.

The event came to Hyderabad as part of the agreement between the Government of Telangana led by the Bharat Rashtra Samithi and Formula E. KTR as minister for Municipal Administration and Urban Development played a key role in organizing the event. The next round of the race was scheduled for February, 10, 2024. But, the new Congress government, which came to power in December 2023, smelt irregularities in the event and began a probe, following which Chief Minister Revanth Reddy’s government cancelled the agreement.

According to sources, the government paid the amount to the organizer as the original sponsor backed out following the event's first round in 2023. To fill the gap, the HMDA paid the money from its coffers without following the protocols to organize the 2024 event. The Revanth’s government now wants a refund of the amount.

Telangana Governor Jishnu Dev Varma has sanctioned the prosecution of KT Rama Rao, IAS officer Arvind Kumar and HMDA official BLN Reddy. Later, chief secretary Shanti Kumari filed a complaint with the ACB to probe the charges under Section 17A of Prevention of Corruption Act.

Now the ACB filed an FIR U/S 13(1)(A) and 13(2) of the Prevention of Corruption Act, along with Sections 409 and 120(B).