ACB summons sponsor Ace NXT Gen's MD for questioning in Formula-E case

Hyderabad, Jan 16 Stepping up its probe into Formula-E car race case, the Telangana Anti-Corruption Bureau (ACB) has summoned the Managing Director of Ace Nxt Gen for questioning on January 18.

Ace Nxt Gen, which was initially the sponsor for the Formula race, was issued notice about 10 days after the ACB conducted searches at its offices and the premises of its sister concerns.

The ACB has already questioned Bharat Rashtra Samithi (BRS) Working President and former minister K.T. Rama Rao, former Special Chief Secretary, Municipal Administration & Urban Development Arvind Kumar,s and Hyderabad Metropolitan Development Authority's (HMDA) former Chief Engineer B.L.N. Reddy.

As per the tripartite agreement signed on October 25, 2022, Ace Nxt Gen was the sponsor for seasons 9,10,11 and 12 of the Formula-E race to be held in Hyderabad. Season 9 was held in Hyderabad on February 10 and 11, 2023.

However, Ace Nxt Gen, a subsidiary of Greenko Group, pulled out of the agreement citing financial losses.

Then Minister for Municipal Administration and Urban Development Rama Rao had directed the HDMA to play the sponsor for Season 10 scheduled to be held in Hyderabad in February 2024.

The HDMA paid Rs.45.71 crore to UK-based Formula-E Operations (FEO) in foreign exchange.

The Congress government that took over in December 2023 cancelled the E race and also sought an enquiry into the transfer of government funds without following the norms and also the allegations of corruption.

The ACB last month registered a case against Rama Rao, Arvind Kumar and B.L.N. Reddy for alleged irregularities in making the payment. The HMDA had transferred the money in British pounds to FEO without mandatory approval from the Reserve Bank of India (RBI) and without adhering to established financial procedures.

The FIR was registered 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. The ACB on January 7 conducted raids at Greenko Group’s offices in Hyderabad and different places in neighbouring Andhra Pradesh in connection with the alleged irregularities in Formula-E sponsorship.

The raids were conducted at the company offices in Madhapur in Hyderabad, Vijayawada, and Machilipatnam in Andhra Pradesh.

The ACB is investigating the sponsorship agreement and the event funding. The agency is trying to find out why Ace Nxt Gen pulled out of the agreement.

The Enforcement Directorate is also conducting the probe under the Prevention of Money Laundering Act (PMLA). The Central agency is looking into possible violations of the Foreign Exchange Management Act (FEMA). Rama Rao on Thursday appeared before the ED for questioning.