HYDERABAD: Senior IAS officer Arvind Kumar was on Thursday questioned by the Enforcement Directorate (ED) regarding allegations of violations in the transfer of funds for conducting the Formula E race in Hyderabad. The agency is investigating whether there were any violations of the Foreign Exchange Management Act (FEMA) or if money was laundered through the transfer of funds to Formula E Operations (FEO).
Sources said that the ED inquired about the bypassing of rules and regulations in transferring foreign currency from Hyderabad Metropolitan Development Authority (HMDA) bank accounts. They also questioned why no approval was obtained from the state Cabinet or the Finance department to transfer funds.
Arvind Kumar, the then Municipal Administration department special chief secretary, reportedly told the ED that then MAUD minister KT Rama Rao instructed him to make the payment immediately, “as any disruption to the Formula E race would damage the state’s brand image.”
The ED further questioned why RBI guidelines were not followed during the fund transfer and sought clarification on Arvind Kumar’s interest in approving the payment from HMDA accounts without a proper agreement with the race organisers.
Sources stated that Arvind Kumar responded by saying that the orders came from Rama Rao, who assured him that procedural approvals would be obtained after the race.
When asked why he did not issue written instructions to former HMDA chief engineer BLN Reddy regarding the funds transfer and instead opted for oral communication, Arvind Kumar reportedly told the ED that the HMDA had the authority to release funds and that the board could review the decision later.
Asked why HMDA stepped in as a sponsor and why the original sponsors withdrew, the senior IAS officer stated that the decision to proceed with HMDA’s sponsorship was taken by Rama Rao, and he was unaware of the reasons for the original sponsors’ withdrawal.
Arvind Kumar also defended his actions, denying any corrupt intent, and suggested the ED verify the records of FEO to confirm that the funds were used appropriately.
The ED questioned Arvind Kumar for nearly nine hours and informed him to appear whenever summoned in connection with the case.