Hyderabad, Dec 21 The Enforcement Directorate (ED) is likely to summon former Telangana Minister K.T. Rama Rao and two officials next week for questioning in the alleged money laundering case in connection with the Formula-E race even as the Anti-Corruption Bureau continued its probe.
The central probe agency on Friday registered an Enforcement Case Information Report (ECIR) under the Prevention of Money Laundering Act (PMLA) against K.T. Rama Rao, senior IAS officer Arvind Kumar, and former Chief Engineer of Hyderabad Metropolitan Development Authority (HMDA) B.L.N. Reddy.
They are likely to be issued notices after Monday to appear before the ED officials for questioning in the case.
Rama Rao, the working president of Bharat Rashtra Samithi (BRS), and two officials were already booked by the Anti-Corruption Bureau (ACB) on December 19 under various sections of the Prevention of Corruption Act.
The First Information Report (FIR) was registered following allegations of financial irregularities during the Formula E-race held in Hyderabad early last year when BRS was in power.
There have been allegations that about Rs 55 crore from HMDA was transferred to London-based Formula E Operations (FEO) without approvals from regulatory authorities.
Acting swiftly after ACB registered an FIR, the ED on Friday morning sought a copy of the FIR and other related documents from the anti-graft agency.
The ED is probing the allegations of violations of PMLA and the Foreign Exchange Management Act (FEMA) in transferring money to a foreign entity. The agency is likely to proceed in the case after recording statements of KTR, Arvind Kumar, and B.L.N. Reddy.
The ED case will focus on the transfer of money from HMDA to FEO.
In October last year, Rs 45.71 crore was transferred to FEO for conducting the Formula-E race. The money was transferred in British Pounds, allegedly without approval from the Reserve Bank of India. The HMDA had not sought a tax exemption on the transfer of money in foreign currency. This reportedly put an additional burden of Rs 8.06 crore on the HMDA.
The issue came to light during auditing. The central agency is likely to look into the transaction and find out who was the ultimate beneficiary of the transferred money.
Meanwhile, the ACB is continuing its probe into the case. It is likely to record the statement of the then Principal Secretary Dana Kishore. The ACB officials may also question some officials of HMDA and Municipal Administration and Urban Development.
The ACB has still not summoned KTR and two other accused for questioning so far. Sources said the notices may be issued next week.
The ACB registered the FIR under Sections 13(1)(A) and 13(2) of the Prevention of Corruption Act, along with Sections 409 and 120(B) of the Indian Penal Code. It is alleged that on the direction of the then Industry Minister KTR, the HMDA transferred money to FEO in violation of RBI guidelines. The payment was reportedly made without obtaining approvals from the Cabinet or the Finance Department.
The BRS leader has denied the allegations of corruption and accused the Congress government of political vendetta. He claimed that the Formula-E race was hosted to make Telangana the hub of electric vehicles.
KTR on Friday filed a quash petition in Telangana High Court. In its interim order on the petition, the High Court barred ACB from arresting KTR till December 30. While granting relief to KTR, the court stated that the investigation in the case may continue. It directed the state government to file its counter by December 23. The court adjourned the hearing to December 27.
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