Formula E Race Noose Tightens Around KTR After Governor Gives Nod for ACB Probe

Hyderabad: Governor Jishnu Dev Varma has reportedly granted permission to the Anti-Corruption Bureau (ACB) to prosecute BRS working president K.T. Rama Rao, the former municipal administration and urban development (MA&UD) minister, in connection with alleged irregularities in the payment of Rs 55 crore for the conduct of a Formula E car race at Hyderabad in February 2023, official sources said here on Friday.

The Governor’s nod came after seeking legal advice from the Attorney General of India, sources said.

The ACB can now proceed with its investigation into Rao’s alleged involvement in financial irregularities. ACB officials are reportedly preparing to launch their inquiry into the case, sources said.

The approval follows Chief Minister A. Revanth Reddy's repeated appeals to the governor to greenlight the investigation. The state government had sought the governor’s approval on November 8.

The Formula E car race was organised with a reported investment of Rs 200 crore. After the Congress government assumed office, allegations of financial misappropriation in the conduct of the race surfaced, especially after the MAUD department lodged complaints with the ACB, citing large-scale fund mismanagement.

The ACB’s request for investigation included the then MAUD secretary Arvind Kumar and a former chief engineer in the Hyderabad Metropolitan Development Authority (HMDA). While the state government approved an inquiry against these officials, the request concerning Rao, a public representative, was referred to the governor for sanction.

Revanth Reddy has been vocal about ensuring a thorough legal process to build a strong case against his political rival.

"Since the courts have mandated prior sanction from the governor to proceed against public servants, we wanted to ensure that the investigation process adheres to legal scrutiny," sources added.

According to the MAUD complaint, Arvind Kumar, as HMDA commissioner, authorised Rs 55 crore payment to Formula E Operations (FEO) without statutory approval. The note files indicated that he had acted on oral instructions from Rama Rao.

In a recent statement, Rama Rao acknowledged issuing these instructions, defending the decision as a means to promote Hyderabad's global image. However, officials argue that this violated financial regulations.

The alleged scam also involves a second agreement signed in October 2023 to host another Formula E race in February 2024. The deal reportedly bypassed approvals from the Election Commission and the finance department, breaching the election-related Model Code of Conduct (MCC).