KTR Faces Serious Allegations on Formula E Race Expenditure – The Anti-Corruption Bureau (ACB) of Telangana has registered a case against K.T. Rama Rao (KTR), former Minister of Municipal Administration and Urban Development, alleging the misuse of ₹55 crore in organizing the Formula E race in Hyderabad. The case also implicates senior officials from the Hyderabad Metropolitan Development Authority (HMDA). In response, KTR has filed a petition in the High Court seeking to quash the charges.
Details of the ACB Case
The ACB’s First Information Report (FIR) names KTR as the primary accused, along with former HMDA Commissioner Arvind Kumar and former HMDA Chief Engineer B.L.N. Reddy. The charges include violations under Sections 13(1)(A) and 13(2) of the Prevention of Corruption Act, and Sections 409 (criminal breach of trust) and 120(B) (criminal conspiracy) of the Indian Penal Code.
KTR's Press Conference Highlights
In a press conference held on December 19, 2024, KTR addressed the allegations, providing detailed explanations and documents to refute the claims:
Purpose of Formula E Racing: KTR emphasized that the initiative aimed to enhance Hyderabad’s global image and position Telangana as a hub for electric vehicles (EVs). He stated that the event attracted significant investments in the EV sector and showcased the city’s capability to host international events.
Challenges in Conducting the Event: He acknowledged logistical challenges in organizing the first race but highlighted that the event was successfully conducted on February 11, 2023, with HMDA incurring an expenditure of ₹12 crore for infrastructure and civic amenities.- Agreement Details: A tripartite agreement was signed on October 25, 2022, between Formula E Operations Limited (FEO), the Telangana MA&UD Department, and Ace Nxt Gen Private Limited, the initial sponsor. The agreement outlined the conduct of Formula E races for four seasons in Hyderabad.
- Sponsor Withdrawal: KTR explained that Ace Nxt Gen Private Limited, the original sponsor, withdrew from sponsoring the second season due to undisclosed differences with FEO. This led to the state government stepping in to fulfill the financial obligations to ensure the continuation of the event.
- Payments and Cancellation: He confirmed that HMDA paid ₹55 crore to FEO for the second season. However, due to administrative delays and the imposition of the Model Code of Conduct during elections, the event was canceled. KTR asserted that all payments were made transparently through official channels.
- Contract Breach Allegations: KTR accused the current Congress government of mishandling the situation, leading to reputational damage for Hyderabad. He mentioned that the government’s failure to honor commitments resulted in potential legal and financial repercussions, including arbitration proceedings initiated by FEO.
Prominent Attendees and Economic Impact of Formula E Race
The inaugural Formula E race in Hyderabad, held on February 11, 2023, was a star-studded affair, attended by global and national dignitaries, celebrities, and motorsport enthusiasts. Among the prominent figures were Telangana Chief Minister K. Chandrashekar Rao, K.T. Rama Rao, FIA President Mohammed Ben Sulayem, and several business leaders from the EV industry. Bollywood celebrities and international sports personalities added glamour to the event. According to Nielsen Sports Analysis, the race generated a significant economic uplift, contributing an estimated USD 83.7 million to Hyderabad’s economy. This impact was attributed to increased tourism, local spending, and global brand visibility for the city, showcasing the event’s broader benefits beyond motorsport.
Timeline of Key Events in the Formula E Contract Controversy
The Formula E agreement was signed on October 25, 2022, between the Telangana government, Formula E Operations (FEO), and Ace Nxt Gen Private Limited. The inaugural event took place on February 11, 2023. Following the event, FEO issued its first reminder for the ₹55 crore payment on May 15, 2023. The payment was made in two installments: ₹30 crore on June 10, 2023, and ₹25 crore on August 5, 2023. FEO sent another reminder on October 1, 2023, urging compliance with contract terms. Meanwhile, Telangana’s assembly elections were conducted on November 30, 2023, with results announced on December 3, 2023. Revanth Reddy took oath as Chief Minister on December 6, 2023. Subsequently, FEO’s CEO met with CM Revanth Reddy on December 15, 2023, seeking assurances on future commitments. A final reminder was sent on January 5, 2024, and when no resolution was reached, FEO filed a contract breach case on February 12, 2024.
Quash Petition in High Court
Following the ACB’s registration of the case, KTR filed a lunch motion petition in the Telangana High Court, seeking to quash the FIR against him. He contended that the allegations were baseless and politically motivated, aiming to tarnish his reputation. The High Court is expected to hear the petition in the coming days.
Conclusion
The controversy surrounding the Formula E race in Hyderabad has escalated into a significant political and legal battle. While the ACB pursues its investigation into the alleged misuse of funds, KTR remains steadfast in his defense, asserting that all actions taken were in the state’s best interest. The unfolding events are poised to have substantial implications for Telangana’s political landscape and its aspirations to host international events in the future.
