ACB set to file chargesheet against K T Rama Rao in Formula E case; alleges quid pro quo, rule violations
HYDERABAD: The Anti-Corruption Bureau is preparing to file a chargesheet next week against former minister K T Rama Rao, IAS officer Arvind Kumar, former Hyderabad Metropolitan Development Authority chief engineer B L N Reddy and others in the Formula E race case.
Officials say the event was proposed through private discussions involving Kiran Malleswara Rao, Dilbagh Gill of Mahindra Racing and Rama Rao, bypassing formal government channels. Investigators maintain that the chief secretary, finance minister, chief minister and cabinet were not informed, which they say violated Business Rules and the Financial Code.
ACB sources allege that Rama Rao decided to host the race without mandatory cabinet approval or departmental scrutiny. They claim he cleared files despite procedural gaps and was linked to a ₹44 crore electoral bond arrangement said to have benefited the then ruling party in April and October 2022.
‘Quid pro quo’ flagged
Investigators say Malleswara Rao allegedly convinced Greenko promoter Anil Kumar Chalamalasetty to purchase electoral bonds worth ₹44 crore for the BRS. In return, Ace Nxt Gen was appointed promoter and later permitted to exit the project after incurring losses.
The ACB has charged Malleswara Rao under Section 12 of the Prevention of Corruption Act and Section 120-B of the Indian Penal Code for alleged abetment and conspiracy.
HMDA expenditures questioned
Officials say the Hyderabad Metropolitan Development Authority was not part of the tripartite agreement but incurred ₹20.99 crore for Season 9 civic works. For Season 10, investigators found that about ₹46 crore was transferred to Formula E Operations Limited on October 10 and 11, 2023, despite no legal obligation.
The total Season 10 payout was ₹54.88 crore. A further ₹28.06 crore tax burden allegedly arose from incorrect compliance, including the use of the Reserve Bank of India Master Circular 8 instead of 17 and failure to file Forms 15CA and 15CB.
Formula E Operations Limited, represented by Alberto Longo, has been booked under Section 12 of the PC Act and IPC Section 120-B for allegedly accepting public funds without contractual standing and declining refund after termination.
Agreements ‘invalid’, say investigators
According to the ACB, the tripartite agreement of October 25, 2022, and a follow-up agreement dated October 30, 2023, were invalid as Arvind Kumar allegedly signed them without authorisation, bypassing Articles 166(1) and 299 of the Constitution.
Officials add that financial rules were bypassed, including mandatory Finance department concurrence for expenditure above ₹10 crore. Payments for Season 10 were processed after the Assembly election schedule was announced on October 9, 2023 and during the Model Code of Conduct, without approval from the Election Commission.
Investigators say the 2023 agreement committed HMDA to liabilities estimated at ₹2,600 crore for Seasons 10, 11 and 12. A note dated September 27, 2023 referenced only Season 10, which officials say avoided mandatory cabinet scrutiny for a multi-year commitment.
Nielsen report disputed
The ACB has questioned a Nielsen assessment cited by Rama Rao claiming ₹2,700 crore economic impact. Officials say no government department submitted data for such evaluation and that Nielsen declined to join the investigation.
Sanction obtained
The agency has received prosecution sanction from the Governor to proceed against Rama Rao under Section 13(1)(a) read with 13(2) of the Prevention of Corruption Act. Officials say permission is not required for private individuals, while a request regarding Arvind Kumar sent to the Department of Personnel and Training has been pending for over 90 days, making sanction deemed granted.
