State mulling legal options on Formula E fiasco, owners slap notice for second installment

HYDERABAD: Deputy Chief Minister and Finance Minister Mallu Bhatti Vikramarka said that the Government is mulling legal action to recover the amounts paid to Formula E Race organisers.

The decision to opt for legal action came after Formula E announced its decision to cancel its Hyderabad edition of the season 10 race scheduled on February 10, 2024. Following this, the former MAUD Minister KT Rama Rao who brought the Formula E race to Hyderabad decried the Congress Government’s decision to stall the car racing event.

Addressing media at the Dr BR Ambedkar State Secretariat on Tuesday the Deputy Chief Minister said that the Government went deep into the whole Formula E race issue and found several lacunae. He said that initially there was a tripartite agreement dated October 26, 2022, through which one company Ace Next Gen was to conduct the event and sell tickets, Formula E was to organise the event and the Telangana Government was to facilitate the races.

“Where is the benefit for the State? The company that sold tickets has left, they were supposed to conduct four races but did only one. The tripartite e agreement was later converted into a bi-party agreement on October 30, 2023,” he pointed out.

Also Read: KTR who brought Formula E race to Hyderabad decries Govt decision to stall car racing event

He said that the Telangana Government agreed to the conditions without following secretariat business rules and the MAUD Special Chief Secretary signed the papers for Rs 110 crore to be paid to Formula E and also secure 80 permissions for the conduct of the races in the city by shutting down traffic in certain sections for two days.

In that second agreement after the Ace Next Gen left, the onus of conduct of the races fell upon the Government, the Minister said. “The officer signed on oral orders, there was no signature of the then MAUD Minister KTR. Rs 55 crore was paid as the first installment and the Formula E people slapped a notice for Rs 55 crore as second installment to the Government,” he said.

Blaming the earlier Government for spending lavishly on unproductive Formula E Races, he said that Rs 20 crore was spent on the track, Rs 30 crore spent by Hyderabad Racing Pvt Ltd and Rs 55 crore first-installment were the amounts spent so far on the race that no one in the State wanted.

Meanwhile, the State Government issued a letter seeking an explanation from Arvind Kumar, the then Special Chief Secretary to the Government for the approvals accorded to the Formula E organisers. The Government wanted to know why the agreement for the conduct of Season 10 was entered without the knowledge or permission of the competent authority, and without exploring the possibilities of finding another private player as "Promoter" replacing the defaulting firm of season 9.

The Government also wanted to know why necessary due diligence was not done to safeguard the financial interests of the HMDA / Government, in the wake of the assumption of additional responsibilities as "Promoter" to the event of Season 10.