Mr Rao had claimed he was being targeted by the Congress and the BJP.
The Telangana governor has cleared an investigation against BRS leader and former state minister KT Rama Rao over alleged irregularities to the tune of Rs 55 crore in the organisation of a Formula E race in Hyderabad last year and the deal for future races, sources said on Friday.
Mr Rao, who is also known as KTR, held the Industry and Municipal Administration and Urban Development portfolios, among others, under the previous government headed by his father and Bharat Rashtra Samithi (BRS) Chief K Chandrashekar Rao.
The Anti-Corruption Bureau had sought Telangana Governor Jishnu Dev Varma's nod to investigate KTR in the Formula E case. The Bureau has alleged that, as the Municipal Administration and Urban Development (MAUD) minister, Mr Rao had given oral instructions for the transfer of Rs 55 crore to one of the race's organisers, bypassing laid-down procedures.
During the Anti-Corruption Bureau (ACB) investigation, which was triggered by a complaint from MAUD, a senior official from the department, Arvind Kumar - who held the post of principal secretary at the time - had admitted that the instructions had been issued verbally by the then minister.
Mr Rao, who is the MLA from Sircilla, had said last month that Hyderabad had benefited from hosting the Formula E race, which could generate a revenue of Rs 750 crore. He alleged that he was being targeted by the current Congress government led by Revanth Reddy - which dislodged the BRS last year after nearly a decade in power since Telangana's formation in 2014 - and the BJP.
"Even the fear of imprisonment won't stop me. If the government permits the investigation, I am ready to go to jail. I will plan a 'padyatra' (foot march) while I am behind bars," he said.
The former minister had also claimed that cabinet approval was not needed for transferring the money.
Contract Details
To conduct seasons nine,10,11 and 12 of the Formula E Race, MAUD had signed a tripartite agreement with Formula E Organisers (FEO) and Ace Nxt Gen Pvt limited in 2022. The ninth season of the car race was held in Hyderabad on February 10 and 11, 2023.
The promoter, Ace Nxt Gen, then dropped out, citing losses. Since the FEO was willing to organise the next season, Arvind Kumar transferred Rs 55 crore - including Rs 9 crore as taxes - to it, allegedly on the advice of Mr Rao
Another alleged irregularity included transferring a tranche of money to FEO after the schedule for the Assembly elections in Telangana was announced, without taking permission from the Election Commission, and making payments in pounds without obtaining clearance from the RBI.