CWG Scam: Trail leads to more Qs about Craig McLatchey

New Delhi: Till recently, the Commonwealth Games must have appeared to be a windfall for two businessmen from Australia whose companies won contracts that added upto more than 200 crores.

The entrepreneurs - Craig McLatchey and Mike Bushell - were widely known to be close friends.  McLatchey's EKS or Events Knowledge Service , is Switzerland-based, and was hired as a technical consultant for the Games.  Bushell's SMAM or Sports Marketing and Management (SMAM) was in charge of landing sponsors and fat-cat international advertisers. 

And then, earlier this month, media reports and an interim audit report said both companies seemed to have been done "undue favours". They were expensive, but the Commonwealth Games organizers argued, they were worth it.  Both companies had been closely associated with prestigious sporting events like the Sydney Olympics and the Melbourne Commonwealth Games.  But the fusillade of allegations led to SMAM losing its contract.  The Games' Organizing Committee (OC) said the deal was off because of "non-performance." It was not exaggerating.  SMAM had failed to land any corporate advertisers.  Those who had signed on were Indian firms who delath directly with the OC, or Public Sector Units (PSUs), who have now said they're likely to back out as sponsors because of the controversy surrounding the games.

There certainly seems to have been a culture of financial impropriety, to put it mildly.  Earlier this week, NDTV reported that SMAM and EKS had common ground: McLatchey.  Unraveling a complicated trail of ownership, NDTV discovered that McLatchey was also a stake-holder in SMAM.  He had also been a member of a coordination committee, that was set up to liaise between the Games' international organizers, and those handling the Games in India.   At the very least, there seemed to be a serious conflict of interest in McLatchey winning big-bucks deals.

McLatchey said, in response to NDTV's report, that he had steered clear of any meetings that could have led to a conflict of interest.  He also said that his  relationship with Bushell's SMAM was a personal one, and not a business one.  "This one F class share is part of the estate planning for Mr Bushell and his wife and was done to facilitate on-going support for Mr and Mrs Bushell's children in the event of the simultaneous death of Mr and Mrs Bushell."
 

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McLatchey also emphasized that he had  "no business interests or voting or controlling rights in SMAM or in any other company owned by Mr Bushell."

But now comes evidence that McLatchey and Bushell seem to virtually be business partners.  

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McLatchey owns 50 percent of Ithaca Private Limited.  The other owner is Robert Buckingham. Ithaca owns over 25% in Bushell's ERIS and Buckingham is the Secretary of ERIS. Further down the chain, ERIS owns 26 percent of SMAM Australia.

Earlier, McLatchey claimed that Ithaca's stake in ERIS was an "F-Class share with no voting rights  and no dividends."  But why would a fullly-paid business share not come with those rights? And why is  Buckingham a secretary in ERIS if the company he co-owns with McLatchey has only this impotent F-class share?

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There's also the fact that till 2002, Bushell was a director of Ithaca - at that time, the company was named SMAM QLD. After the name changed to Ithaca, McLatchey took over as Director from Bushell.

The overlapping business interests-  so emphatically denied by McLatchey- now pose tough new questions that go far beyond the conflict of interest of awarding a man who was officially an organizer of the Games deals that have been punctured lately on various fronts.