Formula-E Race: ED to Call KTR for Questioning Next Week

Hyderabad, Dec 21 (NationPress) The Enforcement Directorate (ED) is anticipated to summon former Telangana Minister K.T. Rama Rao and two other officials next week for questioning related to an alleged money laundering case associated with the Formula-E race, as the Anti-Corruption Bureau (ACB) persists with its investigation.

On Friday, the central investigative agency filed an Enforcement Case Information Report (ECIR) under the Prevention of Money Laundering Act (PMLA) against K.T. Rama Rao, senior IAS officer Arvind Kumar, and former Chief Engineer of the Hyderabad Metropolitan Development Authority (HMDA), B.L.N. Reddy.

Notices are expected to be issued after Monday requiring their presence before ED officials for questioning in this matter.

Rama Rao, who serves as the working president of Bharat Rashtra Samithi (BRS), along with the two officials, was previously booked by the Anti-Corruption Bureau on December 19 under multiple sections of the Prevention of Corruption Act.

The First Information Report (FIR) was initiated following allegations of financial misconduct during the Formula E race, which took place in Hyderabad early last year while the BRS was in governance.

It is alleged that around Rs 55 crore was transferred from the HMDA to the London-based Formula E Operations (FEO) without the necessary approvals from regulatory bodies.

Promptly after the ACB filed the FIR, the ED sought a copy of the FIR and related documents from the anti-corruption agency. By the same evening, the central agency had registered an ECIR based on the ACB’s FIR.

The ED is investigating potential breaches of the PMLA and the Foreign Exchange Management Act (FEMA) concerning the monetary transfer to a foreign entity. The agency is expected to take further steps in the case after collecting statements from KTR, Arvind Kumar, and B.L.N. Reddy.

This case will scrutinize the financial transaction from HMDA to FEO.

In October of the previous year, Rs 45.71 crore was sent to FEO for organizing the Formula-E race. This amount was transferred in British Pounds, allegedly without the necessary approvals from the Reserve Bank of India. The HMDA did not seek tax exemptions on the foreign currency transfer, which reportedly led to an additional burden of Rs 8.06 crore on the HMDA.

The situation was uncovered during an audit. The central agency is likely to investigate the transaction further to determine the ultimate beneficiary of the funds transferred.

Meanwhile, the ACB continues its investigation and is expected to take the statement of the then Principal Secretary Dana Kishore. Officials from HMDA and Municipal Administration and Urban Development may also be questioned.

As of now, the ACB has not summoned KTR or the other two accused for questioning. Sources indicate that notices might be issued next week.

The ACB has registered the FIR under Sections 13(1)(A) and 13(2) of the Prevention of Corruption Act, as well as Sections 409 and 120(B) of the Indian Penal Code. It is alleged that, under the direction of the then Industry Minister KTR, the HMDA transferred money to FEO in violation of RBI guidelines. The payment was reportedly made without securing approvals from the Cabinet or the Finance Department.

KTR has refuted the allegations of corruption, claiming that they are politically motivated actions by the Congress government. He asserted that the Formula-E race was organized to position Telangana as a leader in electric vehicle technology.

On Friday, KTR filed a quash petition in the Telangana High Court. In its interim ruling on the petition, the court has restrained the ACB from arresting KTR until December 30. While allowing relief to KTR, the court noted that the investigation may proceed. It has instructed the state government to submit its counter by December 23, with the hearing adjourned until December 27.