ED books KTR under PMLA, KCR likely to revive political moves

Hyderabad: Federal Investigating Agency - Enforcement Directorate has registered a case under Prevention of Money Laundering (PMLA) Act, against BRS working President and MLA K.T. Rama Rao in the Formula E Race case, alleging 'misuse of government funds'.

This is the second case registered against KTR. The MLA is accused of transferring (verbally directing IAS officer Arvind Kumar to transfer) government funds of Rs 45 Crore to an International agency without the approval of the Cabinet or the state finance department, which by nature is a mandatory.

Sleuths of ED have registered an Enforcement Case Information Report (ECIR) under PMLA Act. This comes a day after the Telangana Anti Corruption Bureau booked KTR, IAS Arvind Kumar and former HMDA chief engineer B L N Reddy. It is alleged that ₹45 crore was paid by HMDA to the foreign company FEO in violation of RBI guidelines.

The ACB registered a case under Sections 13(1)(A) and 13(2) of the Prevention of Corruption Act, along with Sections 409 and 120(B) of the IPC.

The axe is hovering over KTR, since the Telangana High Court has given him relief for a week only. On 20th December, KTR moved the High Court, in a lunch motion petition, Senior Counsel with the Supreme Court C Aryama Sundaram pleaded the court to quash the FIR and to stay all proceedings including his arrest.

Justice Shravan Kumar who heard the arguments, gave a nod to continue the investigation however directed the probe agency not to arrest KTR until 30th December. While the Attorney General of the state Sudharshan Reddy represented the case on behalf of the government. If sources are to be believed., the arrest of KTR seems inevitable.

After two investigating agencies registered a criminal case against KTR, it is most likely that the BRS Supremo may revive his political moves. The top brass of the BRS ( referring to the Rao family) is prepared to face the political battle as well as long legal battles. Top sources say, It was former Chief Minister K ChandraShekar Rao who decided to have senior counsel C Aryama Sundaram represent KTR in the case.

Allegations against KTR

The HMDA was not a party to the agreement, but HMDA made the payments.

The payments were made even before the agreement dated October 30, 2023, was signed by the parties.

A part payment was made when the Model code of conduct was in force without obtaining any approval from

Payments were made in foreign currency in violation of existing rules and regulations related to foreign exchange remittances.

Agreement- Formula E Race

A tripartite agreement was signed on October 25, 2022, between Formula E Operations Limited (FEO), a company registered in the United Kingdom, Telangana MA&UD Department, and Ace Nxt Gen Private Limited, a company registered under the laws of India for conducting Formula E races for Seasons 9, 10, 1 and 12 in Hyderabad. Ace Nxt Gen was the sponsor.

Under this agreement, the role of the government was limited to the extent of building the track for the event and providing other civic amenities. The event was conducted on February 11, 2023.

HMDA incurred an expenditure of Rs 12 crore for the event. The fee and other payments were paid by the sponsor.

While the tripartite agreement was in force, differences seemed to have cropped up between FEO and the sponsor, resulting in the latter backing out from the conduct of the racing events for Season 10.

As per the agreement, part fee payment was overdue by May 2023. Subsequently, discussions were held between the senior officials of the MA&UD Department/HMDA, and FEO representatives about the possibility of the state government taking up the role of the private sponsor and paying the fee.

The then Special CS holding full additional charge of Metropolitan Commissioner, HMDA had put up an HMDA file to the then Minister, MA&UD on September 27, 2023, seeking administrative approvals/sanctions for payment of fee and tax to the tune of Rs 50 crore.

This was approved by Minister KTR.

The total amount paid from HMDA was Rs 54,88,87,043. All these payments were made from the general funds of HMDA.

As per the established procedure in HMDA, administrative sanction for works/expenditure of amounts exceeding Rs 10,00,00,000 should be obtained from the government. In this case, it is noticed that this procedure was not followed, said the FIR.