New Delhi:
After days of public affirmations of transparency, the team organizing the Commonwealth Games has been forced to admit that financial impropriety seems to be the underlying fact of virtually every aspect of the event.
Also came the admission - however reluctantly - that at least some of the rot stems from within. Three key officials have been suspended because they had to be "punished for their failure." Two of them are close aides of Suresh Kalmadi, the Chairman of the Organizing Committee.
Kalmadi was not at a press conference this evening where these decisions were shared. It was left to Lalit Bhanot, Secretary General of the Committee, to reveal that the Enforcement Directorate will now investigate the financial scandals that have erupted six weeks before the Games. The current allegations suggest that the trail of money zigzags between Delhi, Australia and London.
When asked why Kalmadi was not at today's fact-sharing session, Bhanot said, "The allegations are not on Mr Kalmadi. He will come when he needs to. " (
Watch: Enforcement Directorate to probe alleged CWG corruption)
As the Committee hurtles into damage control mode, it also announced that a controversial deal with an Australian firm hired to land hefty sponsorships for the Games has been cancelled. Sports Management and Marketing (SMAM), based in Melbourne, has been given three days' notice that its contract has been terminated for "non-performance".
Bhanot said that none of this is cause for major concern. "We are ready for the Games. As far as the conduct of the Games is concerned, we are ready for that. So there is no failure, not at all. If one mistake is there, it doesn't mean that the whole system is wrong."
The mistake he refers to is the committee's decision to hire without any contract a UK company with a dubious record to provide taxis, portable toilets and other facilities for the Queen's Baton Relay held in London in October. Two lakh pounds were paid to AM Cars, owned by Ashish Patel, an entrepreneur whose track record reads like an A-Z of bad business practices. Blamed for that debacle: TS Darbari and Sanjay Mahindroo, known for their proximity to Kalmadi; and M Jeychandren, who was responsible for Finance and Accounts. The Sports Ministry had already written to the Committee asking for the removal of Darbari and Mahindroo, so their exit was not a shock. (
Read: Exorbitant taxi fares for dictated by Kalmadi aide?)
But are these men the designated fall guys for a larger conspiracy of big boys who tried to make away with big bucks?
There seem to be signs everywhere that point to conflicts of interests between the officials in charge of organizing the Games, and the lucrative contracts they've overseen. Anil Khanna, the Treasurer of the Organizing Committee, has resigned after it was revealed that a one-crore contract for prepping tennis courts was won by a company his son is associated with. Rebound Ace is headquartered in Australia. Khanna said that he has resigned on moral grounds, and his son who heads the Indian subsidiary of the firm, did not benefit from the deal. He also repudiated charges that the synthetic surface used at tennis courts has been internationally slammed.
Sources say the most damning signs of large-scale corruption rest in the fact that by cancelling its contract with SMAM, the Committee has virtually admitted that the deal should never have been struck in the first place. SMAM was entitled to get upto 23 per cent commission for all sponsorship agreements that were signed. So far, those agreements stand at 405 crores against a target of 960 crores. Most of the sponsors are Indian Public Service Units (PSUs); major advertisers are Indian corporates who dealt directly with the Committee. SMAM, therefore, has failed to bring in any large international clients. Yet, in a statement issued before its contract was terminated, the company said it would be entitled to a management and service fee.
The sweetheart deal thrown at SMAM raises even more suspicion among those now investigating it because of allegations that it shares some corporate DNA with World Sports Group, a company already being probed for an 80-crore kickback in a controversial broadcast rights deal for the Indian Premier League.