HYDERABAD: The counter affidavit filed by the Anti-Corruption Bureau(ACB) in the Telangana High Court has opposed the petition filed by BRS MLA and former minister K T Rama Rao seeking a halt to the investigation into the alleged irregularities in conducting the Formula-E race event.
The anti-graft agency alleged that Rama Rao and officials had misappropriated public funds, violated mandatory procedures, and caused a significant financial loss to the public exchequer.
Investigating officer Majid Ali Khan argued that the petitioner filed the criminal petition to obstruct the ongoing investigation. Citing the Supreme Court precedents, the counter-affidavit stressed that powers under Section 482 of the Criminal Procedure Code (CrPC) should be exercised sparingly and only in exceptional circumstances to prevent legitimate prosecutions from being “choked or smothered”.
The counter also stated that the allegations and evidence presented thus far, including official documents and complaint records, establish a prima facie case against the petitioner under various provisions of the Indian Penal Code (IPC) and the Prevention of Corruption Act, 1988.
At the heart of the controversy is the organisation of Formula-E racing events in Hyderabad. A tripartite agreement was signed on October 25, 2022, between Formula E Operations Limited (FEO), the Municipal Administration and Urban Development (MAUD) Department of the Telangana government, and Ace Nxt Gen Private Limited, a private sponsor. The agreement specified that the government’s role would be limited to constructing the race track and providing civic amenities.
The inaugural event was successfully conducted on February 11, 2023, with the HMDA incurring Rs 12 crore in expenditure.
However, disputes arose when the private sponsor, Ace Nxt Gen, backed out of its commitments for the next season, prompting the government to step in as the promoter.
‘HMDA spent Rs 54.88 crore without approval’
The counter affidavit alleges that the HMDA spent Rs 54.88 crore from its general funds on the event without obtaining mandatory administrative approvals or Finance Department concurrence, a requirement for expenditure exceeding Rs 10 crore.
Payments were allegedly made on the directions of the petitioner, Rama Rao, even before executing an agreement, which the ACB described as “anticipatory payments” and an act of impropriety.
A new agreement was signed on October 30, 2023, during the MCC (model code of conduct) period for state Legislative Assembly elections (effective from October 9 to December 4, 2023). The agreement, committing the government to financial obligations of approximately Rs 600 crore over three years, was executed without prior approval from the Election Commission of India (ECI).
The new agreement shifted significant financial and logistical responsibilities to the government, including paying a sponsor fee of GBP 90 lakh (Rs 90 crore). This was done without required approvals from the Finance Department or the competent authority, the ACB alleged.
The counter-affidavit alleges that the petitioner’s actions, along with those of other officials, breached public trust and violated established norms for managing public funds. These alleged acts caused wrongful losses to the public exchequer and wrongful gains to third parties.
The investigating officer clarified that the ACB initiated the investigation based on a complaint dated October 18, 2024, filed by M Dana Kishore, Principal Secretary of MA&UD department.
After reviewing the allegations and obtaining necessary approvals from competent authorities, the ACB registered an FIR to investigate the matter further.
The counter-affidavit emphasised that the petitioner’s plea lacks merit and does not meet the stringent requirements for invoking Section 482 of CrPC.
It argued that the investigation must be allowed to proceed to uncover the full extent of the alleged financial irregularities and violations of procedural norms.