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The Anti-Corruption Bureau (ACB) in Telangana, India, has filed a First Information Report (FIR) against K. T. Rama Rao (KTR), the working president of the Bharat Rashtra Samithi (BRS) party and a former minister, alleging irregularities in payments related to the Formula-E race held in Hyderabad in February 2023. The FIR also names Aravind Kumar, then Special Chief Secretary to the Government, Municipal Administration and Urban Development (MA&UD) department, and B.L.N. Reddy, then Chief Engineer of the Hyderabad Metropolitan Development Authority (HMDA). The complaint, filed by M. Dana Kishore, Principal Secretary to the Government, MA&UD department, alleges that over ₹54.88 crore was paid to Formula-E Operations Limited (F.E.O.) and others in violation of established procedures. This substantial sum involved payments for the Formula-E races, exceeding the initially allocated budget and seemingly violating several governmental regulations.
The crux of the alleged irregularities centers around a tripartite agreement signed on October 25, 2022, between F.E.O., the MA&UD department, and Ace Nxt Gen Private Limited. The government's role was initially limited to infrastructure provision. However, after a dispute between F.E.O. and the sponsor led to the sponsor's withdrawal, the Telangana government unexpectedly assumed the sponsor's financial obligations. This decision, according to the ACB, bypassed standard financial approval processes. Two invoices totaling approximately ₹45.7 crore (approximately £450,000) were received from F.E.O. These payments, made through the Indian Overseas Bank, allegedly lacked necessary approvals from regulatory authorities. This oversight resulted in an additional tax burden of ₹8.06 crore paid to the Income Tax department for withholding tax.
Beyond the direct payments to F.E.O., an additional ₹1.10 crore was paid to the Federation of Motor Sports Clubs of India, bringing the total expenditure by HMDA to ₹54.88 crore. The ACB highlights the significant procedural violations. Administrative sanction for expenditures exceeding ₹10 crore requires government approval in concurrence with the Finance department, a process allegedly not followed in this case. Furthermore, payments were made even after F.E.O. terminated the initial agreement on October 27, 2023, indicating a potential lack of contractual obligation for the payments. The ACB contends that these payments were made in anticipation of a new agreement, which is considered a grave irregularity. A new agreement, signed on October 20, 2023, committed the Telangana government to a further ₹90 crore sponsor fee and additional civic support, amounting to approximately ₹600 crore over three years. This agreement, too, lacked proper administrative and Finance department approvals.
The timing of the payments adds another layer of controversy. The payments were allegedly made during the Model Code of Conduct period for the State Legislative Assembly elections (October 9, 2023 – December 4, 2023) without the required approval from the Election Commission of India. The ACB’s investigation focuses on the blatant disregard for established financial procedures and the potential wrongful loss to the state exchequer. The accused are charged under relevant sections of the Prevention of Corruption Act, and a comprehensive investigation is underway to unravel the extent of the alleged corruption and identify all those involved. The case raises concerns about transparency and accountability in public spending and the potential misuse of public funds in large-scale events.
This case highlights the importance of robust financial oversight and adherence to regulatory procedures in government spending. The alleged violations, including the lack of necessary approvals, the payments made despite the termination of the original agreement, and the timing during the Model Code of Conduct, raise serious questions about governance and transparency within the Telangana government. The investigation's findings will be crucial in determining the full extent of the alleged irregularities and in ensuring accountability for those involved. The potential financial implications for the state, combined with the political ramifications for KTR and the BRS party, make this a significant development in Telangana's political landscape. The ACB's thorough investigation will hopefully shed light on the intricate details of the financial transactions and determine the level of culpability of those implicated in this high-profile case. The outcome will have significant consequences for governance and public trust.
Source: ACB books K T Rama Rao for ₹54.88 crore irregularities in Formula-E deal