HYDERABAD: The Chief Minister A. Revanth Reddy-led Congress government has begun tightening the noose against those involved in the alleged Formula E racing scam took place in during the tenure of the previous BRS government.
Making the first move, the municipal administration and urban development (MA&UD) department has written to the Anti-Corruption Bureau to probe into the scam. The government had earlier issued a memo seeking explanation from then MA&UD secretary Arvind Kumar.
Official sources told this correspondent that former MA&UD minister K.T. Rama Rao’s role would also be investigated since Arvind Kumar had categorically put the onus of permitting him to release funds to the organisers.
The accusations revolve around disbursement of `55 crore to Formula E operations (FEO) from the HMDA’s resources, bypassing both the HMDA's board of directors and the state finance department.
Sources within the government indicated that permission for the ACB to prosecute Arvind Kumar may soon be granted. The Congress government was also contemplating securing prior approval from the Governor to prosecute Rama Rao. This decision follows legal complications faced by the YSRC government in Andhra Pradesh after the arrest of former chief minister N. Chandrababu Naidu in a skill development scam, without seeking the Governor’s approval for his prosecution, in September 2023.
Naidu had built his case entirely on the Jagan Mohan Reddy government not taking approval of the Governor, as per a Supreme Court verdict that that such approval is necessary if the person involved had served in the Cabinet earlier and had taken decisions in his capacity as Chief Minister or as a minister.
The alleged Formula E scam pertains to Hyderabad’s high-profile Formula E race, first held in February 2023 with an investment of `200 crore, backed by sponsors GreenCo and Hyderabad Racing Limited. Following this inaugural event, the MA&UD department reportedly signed a new agreement with FEO in October 2023, under the BRS administration, to host a Season 10 race scheduled for February 2024.
However, as the state was under the election-related model code of conduct (MCC) at that time, the transaction allegedly bypassed necessary approvals from the Election Commission and the finance department.
Arvind Kumar is accused of advancing `55 crore to the FEO for the Season 10 race without approval, in violation of HMDA and state protocols. The Congress government cancelled the planned 2024 event shortly after taking office. In January 2024, Chief Secretary A. Santhi Kumari issued a memo to Arvind Kumar, highlighting these "serious violations" and seeking accountability for the `55 crore payment and procedural lapses.
The replacement of GreenCo with HMDA as a primary financier for the February 2024 event further fuelled suspicions. Following the change in government in December 2023, FEO withdrew from the commitment, citing non-compliance with terms. Arvind Kumar, was transferred to Revenue (Disaster Management Department) in December 2023 soon after Congress came to power.
