Hyderabad Formula E: Telangana govt has issued a legal notice to the former Special Chief Secretary of the government in Municipal Administration and Urban Development Department (MA&UD) and HMDA, IAS Aravind Kumar, for serious violations including a budget loss of 110 crores for the government and hosting the previous season without any prior approvals.
A multi year agreement was previously signed between Formula E and the BRS government, with then MA&UD minister KT Rama Rao playing a significant role in bring the prestigious Motosports event to the city.
Formula E previously issued a statement, cancelling the scheduled race on 10 February, 2024, and exploring actions it could take against the Government for breach of Contract.
New Government questions over alleged fraud in Hyderabad Formula E deal
The newly formed Congress Government in Telangana, in its notice to Aravind Kumar, questioned the transactions of HMDA to Hyderabad Formula E organizers before the signing of an agreement over the scheduled race. A sum off 55 crores(inclusive of 9 crores taxes) , were transferred by the HMDA.
Here's the full memo
The memo contains 9 questions and the officer has 7 days to explain why suitable further action should not be initiated for the lapses. pic.twitter.com/MPjewfpfWa
— Desi Racing Co. (@DesiRacingco) January 9, 2024
Speaking about the same, the Deputy Chief Minister of Telangana Bhatti Vikramarka said that the Governement will take necesarry actions against the all those responsible for signing the tripartite agreement among Ace NextGen, Formula E and the state, as it resulted in the waste of public money.
The Formula E race in Hyderabad has proven to be a failure, resulting in a substantial budget loss of almost ₹110 crores for the state government. This significant financial impact raises concerns about the justification for spending such a large sum solely for a potential image… pic.twitter.com/LXJWcrkovR
— Bhatti Vikramarka Mallu (@Bhatti_Mallu) January 9, 2024
Vikramarka said that the state government has already responded to the notice given by Formula E-race company asking the state to pay up ₹55 crore, which is the remainder of the ₹110 crore, which has been agreed upon at the time of signing of the agreement.
“The proposal was neither cleared in the Cabinet nor the file had the signature of the then MA&UD minister KT Rama Rao. The then special chief secretary of MA&UD Arvind Kumar, who was also commissioner of HMDA at that time, cleared the proposal, stating in the file that he was approving the proposal following telephonic instructions from the minister which was highly irregular and violative of the secretariat business rules,” Vikramarka said.
He accused the Ace NextGen, which was one of the signatories to the tripartite agreement, sold tickets and exited. Bhatti also said that it is NextGen company who is responsible to pay the remaining money and not the government.
“The provisions of the agreement are being examined by legal experts and the state government will take action based on their opinion,” he said.
It’s crucial to note that the Hyderabad round was slated to be India’s only official FIA World Championship event in 2024.