Telangana: ED Set To Investigate BRS Chief KT Rama Rao In Formula E Race Irregularities

The Enforcement Directorate (ED) is set to lodge an Enforcement Case Information Report (ECIR) under the Prevention of Money Laundering Act (PMLA) against KT Rama Rao, former Telangana minister and working president of the Bharat Rashtra Samithi (BRS), and other officials. This is following the Telangana Anti-Corruption Bureau (ACB) registering an FIR over alleged financial irregularities in the organization of the Formula E race, which was held in Hyderabad during February 2023.

What are the allegations?

ACB FIR alleges that KTR, former Municipal Administration Special Chief Secretary Arvind Kumar, and Hyderabad Metropolitan Development Authority (HMDA) Chief Engineer BLN Reddy diverted ₹55 crores to Formula E Operations (FEO), an overseas company. The alleged payment was done without requisite approvals and also in breach of RBI guidelines.

The funds were to finance a second Formula E race, which was eventually called off after the Congress party took control in December 2023. According to the FIR, KTR ordered the flow of funds despite no lawful or contractual basis for the transaction.

The ACB has booked the accused under:

• Sections 13(1)(A) and 13(2) of the Prevention of Corruption Act
• Sections 409 (criminal breach of trust) and 120(B) (criminal conspiracy) of the Indian Penal Code.

ED’s Investigation

Despite the ACB’s FIR, the ED has given assurances that it will file its own ECIR and undertake a probe.” According to ED sources cited in this report, the agency is investigating FEMA violations in the case of ₹45 crore transferred to FEO. The ED might formally seek a copy of the ACB’s FIR to start its probe into the case.

On December 12, 2024, Telangana Governor Jishnu Dev Varma approved the prosecution of KTR and other officials, including Arvind Kumar, based on a recommendation from the Attorney General. The state cabinet then directed Chief Secretary Santhi Kumari to order an ACB investigation into the allegations.

What is the controversy?

The Hyderabad Metropolitan Development Authority (HMDA) first flagged concerns about the ₹45 crore payment to FEO, questioning its legality and the lack of a clear contractual agreement. This raised red flags about the potential misuse of public funds.

KTR has categorically denied the allegations, calling them politically motivated. “I am ready to face any investigation and prove my innocence,” he said. He challenged the Congress government to proceed with the inquiry, accusing it of using the case as a tool for political vendetta.

Telangana Chief Minister A Revanth Reddy refuted KTR’s claims, asserting that the investigation is focused solely on uncovering corruption and holding those responsible accountable. “This is not about politics; it’s about ensuring transparency and accountability in public spending,” Reddy stated.

The ACB has already summoned KTR, Arvind Kumar, and other accused officials for questioning. The ED’s investigation will further scrutinize the money trail, potential laundering, and any violations of FEMA.

The opposition Congress party has termed this high-profile case the “blatant misuse of public funds.”

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