ED Issues Summons To KT Rama Rao And Others In Formula-E Financial Irregularity Case

The Enforcement Directorate (ED) has issued summons to BRS leader KT Rama Rao and several others in connection with alleged financial irregularities related to the Formula-E race held in Hyderabad in February 2023.The ED has summoned KT Rama Rao for questioning on January 7, along with other individuals involved in the case.

IAS officer Arvind Kumar, the former Principal Secretary of the Municipal Administration and Urban Development Department, must appear before investigators on January 2. The ED has called former Chief Engineer of the Hyderabad Metropolitan Development Authority (HMDA), BLN Reddy, to present himself on January 3.

Also Read: Delhi LG VK Saxena Orders Probe Into Sandeep Dikshit’s Surveillance Allegations

The summons follow a complaint filed by the Anti-Corruption Bureau (ACB), which has led to an investigation by the ED under the Prevention of Money Laundering Act (PMLA). The investigation primarily focuses on the alleged irregularities surrounding the transfer of over Rs 55 crore for organizing the Formula-E race. Notably, KT Rama Rao’s sister, K Kavitha, has also come under scrutiny in the case.

Allegations Of Financial Irregularities

The money laundering case arises from allegations that the HMDA improperly transferred funds for the Formula-E event. Specifically, investigators allege that under KT Rama Rao’s leadership, the HMDA failed to comply with Reserve Bank of India (RBI) guidelines when making payments to the Formula-E Organization (FOE) in two installments. Some of these payments were reportedly made in foreign currency.

The ACB’s complaint highlights the alleged mismanagement of these funds, accusing the HMDA of bypassing necessary approvals. As a result, the RBI imposed a fine of Rs 8 crore on the Telangana government for the transaction, and the state government paid the fine after assuming office late last year.

KT Rama Rao Responds To Allegations

KT Rama Rao has strongly denied any wrongdoing, dismissing the allegations as unfounded. He confirmed that his administration paid Rs 55 crore for the event but emphasized that the payment was legitimate and transparent. “Where is the corruption in this? We paid Rs 55 crore, and it was a straightforward transaction,” he assert.

The case centers on a financial transaction in October 2023, when the HMDA transferred Rs 55 crore to FOE in the United Kingdom. The funds were allegedly sent without securing the proper regulatory approvals, including tax deduction requirements. These irregularities have raised concerns regarding the transparency of the event’s funding and have triggered an investigation into the financial dealings associated with the Formula-E race held in Hyderabad earlier this year.