Governor Clears Decks for KTR’s Prosecution in Formula E Race Case
The ACB has questioned Rama Rao thrice in the case, on January 9, May 28 and June 16.
Hyderabad: Governor Jishnu Dev Varma on Thursday allowed the Anti-Corruption Bureau (ACB) to prosecute BRS working president and former minister K.T. Rama Rao in a case related to the alleged diversion of Rs.54 crore to a foreign firm without the Cabinet approval during his tenure as the urban development minister in K. Chandrashekar Rao’s cabinet.
The ACB had registered cases against Rama Rao, IAS officer Arvind Kumar, and former HMDA officer B.L.N. Reddy for diverting funds to Formula E Racing Operations Limited, a UK-based company, for conducting electric car races in Hyderabad. The government had earlier sought the Governor’s permission to register a case against Rama Rao.
On September 9, 2025, the ACB wrote to the government seeking permission to prosecute Rama Rao, which was forwarded to the Governor for approval. After examining legal aspects, the Governor approved the prosecution. Following this, the ACB will proceed with its investigation and may arrest Rama Rao if necessary.
The ACB has questioned Rama Rao thrice in the case, on January 9, May 28 and June 16. The Enforcement Directorate which is examining probably money-laundering the case has questioned the BRS leader once, on Jaunary 16.
Rama Rao did not comment on the Governor’s sanction while the BRS rushed to defend him.
The ACB is awaiting a clearance from the Centre’s department of personnel and training (DoPT) for prosecuting Arvind Kumar.
According to the ACB report, when Rama Rao was municipal administration and urban development minister, Arvind Kumar, then municipal administration secretary, and B. L. N. Reddy, former chief engineer of the Hyderabad Metropolitan Development Authority (HMDA), transferred Rs.54 crore to Formula E Racing Operations in September and October 2023, allegedly to safeguard the interests of a private firm that initially entered into a tripartite agreement with event organisers and the state government, but withdrew due to heavy financial losses.
The ACB, however, said that the payments from HMDA were illegal as the money was diverted without approval from the Cabinet and without clearance from the finance department. Significantly, the funds were transferred ahead of the 2023 Assembly elections when the Model Code of Conduct was in force.
The ACB called the fund transfer a clear case of quid pro quo, alleging that Rama Rao’s party received electoral bonds from a third party in return for facilitating the firm's exit from the tripartite agreement.
The anti-graft agency had taken investigation following a complaint lodged by municipal administration secretary M. Dana Kishore on October 18, 2024,against the alleged irregularities in the Formula E race agreement and the transfer of Rs.54 crore.
The Directorate of Enforcement (ED) said it would also seek fresh approval from Governor Jishnu Dev Varma to prosecution BRS working president and former minister K.T. Rama Rao for an investigation into the alleged money-laundering aspects in the Formula E racing irregularities case.
According to sources in the ED, the Governor's order of Thursday permitting an investigation by the ACB would not be applicable to the Central agency. The ED would therefore seek permission separately.
Sources said the ED would also closely watch the ACB probe and examine its chargesheet in the case. The ED had earlier this year questioned Rama Rao.
