The Telangana High Court on Tuesday, January 7, dismissed the petition filed by BRS working president and former municipal minister KT Rama Rao (KTR) to quash the First Information Report (FIR) in the Formula-E race case.
The ACB last month filed a case against KTR, former Special Chief Secretary to Government, Municipal Administration and Urban Development (MA&UD) department Arvind Kumar and former Chief Engineer of Hyderabad Metropolitan Development Authority (HMDA) BLN Reddy for alleged Rs 54.88 crore irregularities in Formula-E deal. KTR had described the FIR filed against him by the ACB as ‘politically motivated’.
The FIR was registered on a complaint by the Principal Secretary to Government, MA&UD department M Dana Kishore, who stated that foreign remittances were made without prior approvals of the relevant regulatory authorities, which resulted in an additional tax burden to HMDA to the tune of Rs 8.06 crore. The FIR was registered under the Prevention of Corruption Act as well as under Indian Penal Code (IPC) sections 409 (criminal breach of trust) and 120B (criminal conspiracy).
The Formula E race was brought to Hyderabad by KTR along with IAS officials like Arvind Kumar and Principal Secretary of IT and Industries Jayesh Ranjan in 2023. The first race in Hyderabad happened as part of Season 9 in February 2023. The Congress accused the BRS of paying Rs 55 crore to Formula E to shield the event’s promoter Ace Nxt Gen, a subsidiary of the well-known Greenko group.
In response to the government’s claims, Arvind Kumar mentioned twice that KTR , who was the then Municipal Administration minister, was kept in the loop at every step. Arvind stated that Ace Nxt Gen did not make the returns they expected and backed out only when Season 10 was about to commence.
“The then Promoter (Ace Nxt) has not cancelled his part of the contract officially till date. However, as understood, considering the net direct returns not in accordance with the Promoter’s expectations or what he had invested, they had not come forth till the time the agreement for Season 10 was to be confirmed and first instalment of fees paid by June 2023,” Arvind said.
According to Arvind, considering the time crunch, KTR directed the Municipal Administration Department to go ahead with Season 10 despite the lack of an alternative promoter. By September 2023, KTR had decided that HMDA would step in. The Telangana government ended up paying half the licensing fee of up to approximately Rs 50 crore to Formula E for conducting the race.
Explaining the decision, a source from the BRS told TNM in January 2023 that the BRS government’s decision to step in and take on the role of a promoter stemmed from wanting to shape Hyderabad’s cultural capital and branding. “It was understood that even with the promoter’s involvement, it would be a loss-making venture for everyone, including the state government. Some events are for brand building and the government cannot look at revenue initially. However, the extent of the loss was not anticipated by Ace Nxt Gen, hence they backed off,” the source said.
Responding to the Congress’ query about why action was not taken against Ace Nxt Gen, Arvind Kumar replied that there was still time left and the state government can still hold the company accountable. A source in the BRS party who TNM spoke to alleged that the Congress has forced Arvind to pass the blame on to KTR, thereby enabling them to levy false allegations of corruption against the BRS.
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