New Delhi: K.T. Rama Rao (KTR), the Working President of the Bharat Rashtra Samithi (BRS) and former state Minister, emerged from an eight-hour interrogation on Thursday (January 9, 2025), by a three-member team of the state’s Anti-Corruption Bureau (ACB) regarding alleged irregularities surrounding the Formula E car race hosted in Hyderabad on February 10 and 11, 2023.
The ACB’s investigation focused on allegations of financial mismanagement and procedural lapses during KTR’s tenure as Municipal Administration Minister in the previous BRS government, particularly in connection with the Formula E race held in February 2023.
The primary allegation is that KTR authorised an advance payment of approximately Rs. 55 crore to a foreign entity based solely on verbal orders. Investigators are examining the allocation of Rs. 54.88 crore, highlighting the absence of three critical approvals – state cabinet approval, finance department clearance, and Reserve Bank of India (RBI) authorisation.
Legal pressure intensifies after high court refuses to quash ACB’s FIR
Legal pressure on KTR has intensified following the Telangana High Court’s rejection of his petition to quash the ACB’s First Information Report (FIR) on January 7, 2024, effectively withdrawing his protection from arrest. The court emphasised its inability to intervene in an ongoing investigation, citing the principle of equal application of the law.
When KTR’s lawyers indicated that he would approach the Supreme Court, the Telangana government had preemptively filed a caveat petition to ensure its arguments are heard if such an appeal is made. However, the Supreme Court refused to hear KTR’s special leave petition (SLP) challenging the High Court’s decision on January 9, and instead pushed the hearing to January 15, 2025.
Earlier, senior members of the current Congress-led state government had hinted at potential legal actions involving prominent figures from the previous BRS administration.
Revenue Minister Ponguleti Srinivas Reddy, speaking at a Warangal meeting on November 7, referred to an impending development in Telangana politics as an “atom bomb”.
Adding to KTR’s woes, the Enforcement Directorate (ED) has initiated a case under the Prevention of Money Laundering Act (PMLA) and summoned KTR for questioning on January 16, 2025.
Formula E event, electoral bond donations under scanner
A key focus of the investigation is the allegation of a potential quid pro quo arrangement. The Telangana government has revealed that Greenko Energies Company, through its subsidiary AceNextGen Private Limited, partnered with the state as sponsors, and provided electoral bonds worth Rs. 41 crore to the then-ruling BRS party in October 2022, prior to the formalisation of a tripartite agreement on October 25, 2022.
According to the government, Greenko issued Rs. 31 crore in one transaction and Rs. 10 crore in another before the agreement was signed.
The timing of these donations has raised questions about whether the subsequent agreements with Greenko’s subsidiary were influenced by these financial contributions. The ACB is reportedly investigating potential links between the Rs. 41 crore in electoral bond donations made in October 2022 and the government’s decision-making related to the Formula E event.
The ACB is investigating alleged irregularities in the transfer of Rs. 46 crore (excluding taxes) in pounds sterling to London-based Formula E Operations for the second edition of the Formula E Race, which was scheduled for February 2024 in Hyderabad but later canceled. Investigators are examining the rationale behind transferring Rs. 46 crore in two installments in October 2023, reportedly before a new agreement was signed to replace AceNextGen Private Limited with the Hyderabad Metropolitan Development Authority (HMDA) as the event sponsor.
The ACB’s inquiry is based largely on statements from Arvind Kumar, the former principal secretary of HMDA, who appeared before officials on Wednesday, (January 8) and Dana Kishore, the current Municipal Administration principal secretary and complainant in the case.
The transfer of Rs. 54,887,043 to Formula E Operations’ (FEO) UK account in two installments – on October 3 and October 11, 2023 – via the Indian Overseas Branch in Himayat Nagar, Hyderabad, is highlighted in the Anti-Corruption Bureau’s (ACB) FIR as a key element of the alleged financial irregularities.
According to the FIR, the transfer was authorised on the verbal instructions of KTR, who was then a minister. The transaction required the Hyderabad Metropolitan Development Authority (HMDA) to incur an additional Rs. 8.60 crore in income tax. Additionally, HMDA paid Rs. 1.10 crore to the Federation of Motor Sports Clubs of India for various fees.
The ACB’s investigation has identified several potential regulatory violations. According to the FIR, financial regulations require cabinet approval for transfers exceeding Rs. 10 crores. However, the funds were allegedly transferred to a foreign company based solely on verbal instructions from KTR.
The FIR also claims that Reserve Bank of India (RBI) permission, required for foreign currency transfers to international institutions, was not obtained. Additionally, agreements and payments related to the Formula E races were reportedly finalised during the Telangana Assembly election code period (October 9 to December 4), including commitments for three additional years of races costing Rs. 600 crores. These agreements would have required approval from the Election Commission of India.
KTR terms allegations politically motivated, slams Telangana CM A. Revanth Reddy
KTR, accompanied by his advocate J. Ramachandra Rao, arrived at the ACB office in Hyderabad at 10 a.m. on January 9, to participate in the questioning. Following the lengthy interrogation, he described the ACB’s case as “frivolous” and claimed investigators presented approximately 40 variations of the same four questions.
He suggested the line of questioning was repetitive, politically motivated, and possibly directed by Chief Minister A. Revanth Reddy. KTR defended his actions, stating they were taken in the best interest of the state.
On the morning of the interrogation, KTR appeared composed as he left his residence and addressed the media, reiterating his innocence and describing the investigation as politically motivated. He stated his determination to challenge Chief Minister A. Revanth Reddy, remarking that he was “prepared to risk his life in the process.”
KTR defended his role in hosting the Formula E race, characterising it as a strategic initiative to enhance Hyderabad’s global standing and asserting that the financial arrangements were made in the state’s best interests. He also criticised the current government’s decision to cancel future Formula E races, calling it a missed opportunity for the city.
Additionally, he denied allegations of using his ministerial position to benefit family members, indirectly addressing accusations against him.
KTR, who was initially scheduled to appear before the ACB on January 6, declined to do so without the presence of his counsel. On January 8, he petitioned the high court for permission for his advocate to accompany him, which was subsequently granted.
By way of context, the Formula E championship is an international single-seater racing series sanctioned by the Fédération Internationale de l’Automobile (FIA) and designed to promote electric vehicles. Hyderabad hosted a round of the championship on February 10th and 11th, 2023, under the BRS government. In his capacity as a minister, KTR supported the initiative as a way to enhance the city’s international profile and attract investment.
The idea of bringing Formula racing to Hyderabad was first explored by Chief Minister of the undivided state Chandrababu Naidu in 2001, who discussed the possibility with F1 CEO Bernie Ecclestone and began acquiring land in the Gopanpally area.
The BRS government, under KTR’s initiative, revived the idea in 2021. AceNextGen Private Limited partnered with the Telangana government as sponsors. In January 2022, Formula E teams visited Hyderabad for discussions, and after the government proposed Necklace Road as the venue, approval was granted in June 2022.
Hosting the Formula E race in Hyderabad required extensive logistical planning and infrastructure development. Roads around the Hussain Sagar lake were modified, spectator facilities were constructed, and agreements were secured with Formula E organisers and sponsors.
A two-and-a-half-kilometer track was built after clearing trees, with special arrangements made on 11 acres near the IMAX building. The race route included the Telugu Talli flyover, Secretariat, NTR Ghat, IMAX, NTR Park, and Lumbini Park. A tripartite agreement signed on October 25, 2022, between the Telangana government, Formula E Operations (FEO), and Greenko Energies’ subsidiary AceNextGen Private Limited outlined plans for Hyderabad to host the race for four consecutive seasons—covering season 9 (held on February 12, 2023), as well as seasons 10, 11, and 12.
