The Anti-Corruption Bureau (ACB) on Thursday (December 19, 2024) registered an FIR against Bharat Rashtra Samithi (BRS) executive president and former minister KT Rama Rao for alleged irregularities in the conduct of the Formula-E race held in Hyderabad. February 2023.
Arvind Kumar, then special chief secretary to the government, municipal administration and urban development (MA&UD) department, and BLN Reddy, then chief engineer of the Hyderabad Metropolitan Development Authority (HMDA), were also named in the first information report.
On Wednesday (December 18, 2024), Principal Secretary to Govt., MA&UD Department M. The case was filed after Dana Kishore filed a complaint. The complainant alleged that over ₹ 54.88 crore was paid to Formula-E Operations Limited (FEO) and others in “gross violation of established procedures”.
According to the document, on October 25, 2022, a tripartite agreement was signed between UK-based FEO, MA&UD Department of Telangana Government and India-based SNXT Gen Pvt Ltd (Sponsor) to conduct Season 9, 10, Formula-E races. 11 and 12 in Hyderabad. According to this agreement, the government’s role was limited to building tracks for the program and providing other civic amenities.
The first program was held on February 11, 2023 and HMDA spent ₹ 12 crore, while fees and other payments were paid by the sponsor.
However, when the tripartite agreement was implemented, differences arose between the FEO and the sponsors, resulting in the latter withdrawing from the operation of racing events for season 10 and as per the above agreement, partial fee payments were due by May 2023, read the document. The possibility of the state government taking on the role of private sponsor and paying the fee was discussed between senior officials of MA&UD and FEO representatives, it added.
HMDA received two invoices — one dated September 25, 2023 for £22,50,000 (₹22.69 crore plus applicable tax and commission) towards the ‘first installment’ of the promoter’s fee for Season 10 and another dated September 29, 2023 for £22,50,000,000. 23.01 crore plus applicable taxes and commission) towards Season 10 second installment of promoter’s fee.
Proceedings were issued by Chief Engineer, HMDA on October 3rd and October 11th respectively and the funds were transferred to M/s FEO UK through Indian Overseas Bank Himayathnagar branch on the same day.
However, according to ACB, even though foreign remittances were received in both cases, the formal approval of the relevant regulatory body was not taken before transferring the large amount of money. “Foreign remittances have led to an additional tax burden to HMDA, which was made to pay ₹8.06 crore to the Income Tax Department for withholding for two installments,” officials said.
HMDA had released an amount of ₹ 1.10 crore to the Federation of Motor Sports Clubs of India for FIA Interstate Championship calendar fees and permit fees, taking the total amount paid by HMDA to ₹ 54.88 crore.
According to the FIR, “All these payments were made from the general fund of HMDA. As per the procedure established in HMDA, administrative approval for works/expenditures exceeding Rs. 10 crore should be obtained from the Government, which in concurrence with the Finance Department gives such approval. In this case, this procedure was not followed.” is.”
Further, the FEO terminated the Agreement on October 25, 2022 through email communication dated October 27, 2023 and the above payments were made even though there was no obligation to make these payments under the then Subsisting Agreement. “Apparently, these payments were made in anticipation of an agreement that was to be executed. This is a serious irregularity,” the FIR further read.
After the payment, a new agreement was signed between the FEO and the MA&UD department on 20 October 2023 under which the Telangana government undertook not to pay the sponsorship fee of £90,00,000 (₹90 crore). The burden of providing civilian and logistical support.
The complainant further alleged that the payment was made without any prior approval of the Election Commission of India (between October 9, 2023 and December 4, 2023) when the Model Code of Conduct for State Legislative Assembly elections was in force.
Additionally, the new agreement includes a financial commitment of around ₹ 600 crore for the next three years, including additional recurring expenses. “However, before the agreement between the FEO and the government on October 30, 2023, the concerned officer did not obtain any administrative approval from the competent authority including clearance from the finance department,” the document said.
The ACB said that the glaring irregularities in payment by HMDA and serious irregularities in execution of both contracts warrant further investigation/investigation into the entire matter.
“On examination of the above mentioned letter, it was found that the civil servants involved, were fully aware and aware of the mandatory requirements like approval of the Finance Department, prior approval of the competent authority of the Government and existence of a model code of conduct. It appears that the exchequer has suffered a wrongful loss and third parties have received a wrongful benefit as a result,” the bureau said.
A case has been registered against the accused persons under the relevant sections of Prevention of Corruption Act and a detailed investigation has been started in this matter.
published – December 19, 2024 at 08:49 am IST