Formula-E Case: Prosecution nod expected soon
Hyderabad: The Anti-Corruption Bureau (ACB) has forwarded its investigation report on the Formula-E car race case to the state vigilance commission, which will be scrutinized before being forwarded to the concerned officials in the state government for a green signal for the prosecution. The report alleges corruption involving former Bharat Rashtra Samithi (BRS) working president KT Rama Rao (KTR), former Chief Secretary Arvind Kumar, and other officials. The state government is expected to grant permission for prosecution within two days, following scrutiny by the vigilance commission, as per the sources familiar with the case.
Allegations of Quid Pro Quo
The ACB‘s nine-month investigation alleges a clear quid pro quo arrangement. Organizations that sponsored the Formula E event with approximately Rs. 44 crore subsequently donated an equivalent amount to the BRS party through electoral bonds. The agency claims the sponsorship, justified as operations costs, was reciprocated with electoral bonds, a transaction they assert has been clearly proven.
Other individuals named in the report include senior official BLN Reddy and Formula-E CEO Kiran Rao. The ACB has sought the Governor’s permission to prosecute the public servants involved. Once granted, the agency will immediately file a charge sheet.
Details of the Financial irregularities
The case dates back to a tripartite agreement signed on November 25, 2022, between Formula E Operations Limited (FEO), the MA&UD Department, and Ace Nxt Gen Private Limited. The government’s role was initially limited to building the track and providing civic amenities.
The first event in February 2023 cost the Hyderabad Metropolitan Development Authority (HMDA) Rs. 12 crore. After a sponsor withdrew, former Special Chief Secretary Arvind Kumar sought approval from then-Minister KTR for a payment of Rs. 160 crore for a new agreement. HMDA, which was not originally a party to the contract, subsequently transferred two installments totaling Rs. 45.7 crore to FEO UK. Additional tax payments brought the total unauthorized expenditure to Rs. 54.88 crore, according to the investigation.
The ACB probe identified key irregularities: payments made without Finance Department approval, funds released before a formal agreement was signed on October 30, 2023, and transactions processed during the Model Code of Conduct without Election Commission approval. Foreign currency payments also allegedly violated exchange regulations.
FEO later terminated the agreement, citing the government’s failure to fulfill its host city obligations. The state government responded by calling the agreement “fraudulent,” noting it lacked approval from the Council of Ministers and the necessary concurrence from the Finance and Law Departments.
