Ex-HMDA Official Questioned in Formula-E Case Financial Irregularities Investigation

Hyderabad: In a major development surrounding financial irregularities in the organization of the 2023 Formula-E race in Hyderabad, former Hyderabad Metropolitan Development Authority (HMDA) chief engineer B.L.N. Reddy appeared before the Anti-Corruption Bureau (ACB) for questioning.

The ACB is investigating the alleged mismanagement of funds related to the event, which was organized under the administration of the Bharat Rashtra Samithi (BRS) government.

Reddy appeared at the ACB office in Banjara Hills at around 10 a.m. on Friday for questioning in connection with the transfer of approximately Rs. 55 crore from HMDA to the UK-based Formula-E Operations (FEO).

The ACB is investigating these financial transactions, which reportedly took place in foreign exchange and allegedly bypassed the prescribed procedural protocols.

Investigations into Financial Irregularities

Reddy is the third individual to be questioned in the ongoing investigation, following the questioning of senior political leaders and officials. On Thursday, the Enforcement Directorate (ED) interrogated former Municipal Administration & Urban Development (MA&UD) department special chief secretary Arvind Kumar for over nine hours. Kumar had reportedly been directed by K.T. Rama Rao, the then minister for MA&UD, to expedite the payment, citing the potential damage to the state’s reputation if the Formula-E event was delayed.

The questioning of Reddy is part of the larger investigation initiated after the ACB filed a First Information Report (FIR) against K.T. Rama Rao, Arvind Kumar, and Reddy. The FIR accuses them of facilitating payments from HMDA to FEO and its associated entities without following the due financial and regulatory processes.

Alleged Violations of Foreign Exchange and Money Laundering Laws

The focus of the investigation is on the transfer of Rs. 55 crore, which was allegedly made in violation of the Foreign Exchange Management Act (FEMA). The ED is also investigating potential violations of the Prevention of Money Laundering Act (PMLA) concerning these transactions. Reddy, during his questioning by the ED on Wednesday, reportedly stated that he had followed the instructions of Arvind Kumar regarding the transfer of funds to ensure that the event went ahead without delay.

In his defense, Reddy explained that no clearance had been obtained from the Reserve Bank of India (RBI) for the foreign exchange transaction, as is required under FEMA guidelines. The investigation has also raised questions about whether there was any possibility of money laundering involved in the transfer.

Opposition and Political Repercussions

The Formula-E case has drawn considerable political attention, especially with the involvement of senior BRS leaders. K.T. Rama Rao, who is the first accused in the case, is set to be questioned by the Enforcement Directorate on January 16. The political fallout from these investigations is significant, as the Formula-E race was one of the state government’s marquee events, intended to showcase Hyderabad’s global presence.

The FIR filed by the ACB includes serious charges under Sections 13(1)(A) and 13(2) of the Prevention of Corruption Act, along with Sections 409 (criminal breach of trust by a public servant) and 120B (criminal conspiracy) of the Indian Penal Code (IPC). These charges reflect the severity of the allegations and the ongoing scrutiny of government officials and their handling of public funds.

Also Read | KTR Appears Before ACB in Formula-E Race Case: Investigations Continue

Ongoing Investigations

The case continues to unfold, with the ACB and ED conducting a joint investigation into the financial discrepancies surrounding the Formula-E race. The ongoing questioning of various officials and leaders underscores the scale of the investigation and the potential legal consequences for those involved.

The ACB’s investigation and the ED’s probe are expected to bring further clarity on the role of government officials in the alleged misappropriation of funds, and whether there was any deliberate effort to bypass financial regulations for personal or political gain.

As the investigation progresses, the public and political implications of the Formula-E financial irregularities case are expected to grow, with further questioning of high-profile figures such as K.T. Rama Rao and other officials in the coming days. The results of these investigations could have a significant impact on the BRS party’s credibility and political standing in the state.

The ACB and ED have confirmed that they will continue their probe into the matter, ensuring that all responsible parties are held accountable for any violations of the law. The case serves as a reminder of the importance of transparency and adherence to financial regulations in the management of public funds.