Telangana Governor Jishnu Dev Verma has granted approval to prosecute K. T. Rama Rao (KTR), the working president of the Bharat Rashtra Samithi (BRS) party, in connection with alleged financial irregularities surrounding the Hyderabad Formula E racing event held in February 2023.

Details of the Allegations

The state’s Anti-Corruption Bureau (ACB), which sought the Governor’s nod in September, has booked KTR under the Prevention of Corruption Act and sections of the IPC, including criminal breach of trust and criminal conspiracy.

At the time of the event, KTR served as the Minister for Municipal Administration and Urban Development (MAUD) under the previous BRS government led by his father, K. Chandrashekar Rao. The central allegation against him is that he authorized the transfer of Rs 45 crore (approximately) to the foreign entity, Formula-E Organisers (FOE), without obtaining the necessary clearance from the state Cabinet.

The ACB’s investigation further alleges that the transfer, conducted by the Hyderabad Urban Development Authority (HMDA) in British pounds, violated regulations set by the Reserve Bank of India (RBI). This violation reportedly resulted in an Rs 8 crore fine being imposed on the state government, which the current Congress administration, led by Chief Minister A. Revanth Reddy, subsequently paid. The discovery of these violations occurred when the new government investigated the reason for the RBI fine.

Status of the Investigation

The ACB has named KTR as the primary accused. Others implicated include Arvind Kumar, the then MAUD Principal Secretary and HMDA Commissioner, and B. L. N. Reddy, the former HMDA chief engineer. Arvind Kumar reportedly stated in his defense that he proceeded with the payments based on instructions from KTR.

Separately, the Enforcement Directorate (ED) is also investigating the case under the Prevention of Money Laundering Act (PMLA) and the Foreign Exchange Management Act (FEMA), given the significant transfer of funds to a foreign entity.

KTR has approached the Telangana High Court seeking to quash the ACB’s First Information Report (FIR), and the court has issued an interim order directing the ACB not to arrest him until further notice.

Political Context and Defense

The Governor’s decision follows political commentary from the ruling party. Chief Minister Revanth Reddy had recently criticized the delay in granting prosecution sanction, suggesting that the BJP was attempting to protect KTR.

The BRS strongly denies the allegations, with party leaders terming the move as “the peak of political vendetta” orchestrated by the Congress government for political gain ahead of local body elections.

KTR has consistently defended his actions, stating publicly that he authorized the transactions in the state’s interest to host the Formula E race and enhance Hyderabad’s global reputation. He maintains that the payments were properly authorized and that, in his capacity as Vice-President of the HMDA—which he claims operates independently—he was not required to seek approval from the Finance Department or the Cabinet for the transaction.

Following the controversy, the 2024 Hyderabad Formula E race was canceled after the new MAUD administration decided against fulfilling the Host City Agreement.