HYDERABAD: Former chief engineer of Hyderabad Metropolitan Development Authority (HMDA) BLN Reddy appeared before the Enforcement Directorate (ED) on Wednesday in connection with the Formula-E race case.
The ED is investigating the transfer of `55 crore in foreign exchange, including taxes, to Formula E Operations Ltd in London in October 2023 in violation of the provisions of the Foreign Exchange Management Act (FEMA) and Prevention of Money Laundering Act (PMLA).
According to sources, the central probe agency questioned Reddy for about nine hours on different aspects of the transfer of money, including why no clearance was taken from the Reserve Bank of India (RBI). Sources stated that Reddy told the officials that the transfer was done online and that income tax was deducted and paid to the department.
The officials wanted to know who had ordered the transfer of the funds and whether there were any written orders to him from any authority in the government.
Reddy reportedly told the inquiry officials that MAUD department’s the then special chief secretary Arvind Kumar, who was also the commissioner of HMDA, had asked him to transfer the funds to Formula E Race Operations in London.
‘Why company opted out of deal to conduct race?’
The probe agency officials are understood to have questioned him why the sponsor company withdrew from conducting the second edition of the Formula-E race. Reddy told the officials that he did not know why the company opted out of the agreement to conduct the second edition of the race.
Sources said that the probe agency questioned him why HMDA became the sponsor and who took the decision to which he replied that he was not aware of the reason and that his job was to take up civil works for the Formula-E race tracks.
The ED questioned him again and again about the money transfer which was in violation of FEMA and PMLA but Reddy only told the agency officials that he did not know anything about the reasons. When the probe agency wanted to know if he had transferred the money under pressure or threat, he reportedly said that he had to follow the instructions of his higher officials.
The ED will question senior IAS officer Arvind Kumar on Thursday in connection with the same case.