Hyderabad: The Anti-Corruption Bureau (ACB) on Thursday registered a case on alleged Formula E-car race scam, in which former minister and BRS working president K.T. Rama Rao was listed as the prime accused.
Senior bureaucrat Arvind Kumar was made the accused no 2 or A2 and former Hyderabad Metropolitan Development Authority chief engineer B L N Reddy was listed as the A3. The investigating agency accused the three of conspiring to benefit a private agency (Formula E Operations Ltd or FEO) by diverting and misusing `54.88 crore of public money in violation of all rules and regulations.
Initially, FEO, HMDA and Ace Nxt Gen entered into an agreement for conducting Formula E-car race’s season 9,10,11 and 12 in Hyderabad. Ace Nxt Gen, however, opted out later.
The grave irregularity, as pointed out by the ACB, was that Rama Rao and Arvind Kumar got the funds transferred to FEO though there was no obligation on the part of HMDA to transfer money as per the existing agreement.
According to ACB, the money was transferred without following the due process even though it foreign remittances. It said that these officials did not take the permission of the Election Commission of India, which was mandatory either to transfer money or enter into a new agreement as the model code of conduct for the Assembly elections was already set in.
The ACB also accused the officials of getting the HMDA to enter into an agreement with FEO without an approval of the state cabinet.
In the First Information Report (FIR), investigation officer and DCP Majid Ali Khan stated that a tripartite agreement was signed on October 25, 2022. The event was conducted on February 11, 2023 and for which HMDA spent Rs.12 crore.
The FIR further said that then chief special secretary Arvind Kumar had sent a file to the then MA&UD minister K.T. Rama Rao, seeking administrative approvals for the payment of fee and tax to the tune of approximately Rs.110 crore and for spending at least Rs.50 crore for undertaking ancillary works for conducting the event, including but not limited to civil works and municipal services.
The then chief engineer B.L.N. Reddy sanctioned Rs.22.69 crore as a first instalment and Rs.22.5 crore as the second installment, which were transferred to the UK-based company from Indian Overseas Bank, Himayatnagar branch.
In both the instances, the ACB found violations. “No formal approvals from the relevant regulatory authorities were obtained before transferring the huge amounts through foreign remittances. All these payments were made from the general funds of HMDA,” according to the ACB..
The ACB also found that no prior approval of the Election Commission of India was obtained for making these payments by HMDA even though the Model Code of Conduct came into effect on October 9, 2023, which continued till December 4, 2023.
"A total of Rs.54.88 crore was paid to the UK-based company in gross violation of established procedure. The approvals of the competent authority in concurrence with the finance department was not obtained. The payments were made even before the agreement was signed between parties. Payments were made in foreign currency in violation of existing rules and regulations related to foreign exchange remittances," the ACB said in the FIR.
