New Delhi:
A cascade of corruption allegations threaten the credibility of the organizers of the Commonwealth Games in Delhi. Suresh Kalmadi, the Chairman of the Organizing Committee, has set up a three-member team to investigate those allegations.
Video Special: Corruption scandal hits CWGThe team's report on whether crores - much of it taxpayers' money - was mismanaged is expected today.
(Read: Probe report today; Darbari may be sacked)Team Kalmadi also confronts another financial catastrophe. The Games are less than two months away and sponsors aren't exactly lining up around the block. As of today, sponsorship for the Games stands at Rs 405 crore as against a target of Rs 960 crore. The target was 12 sponsors - two have signed on. Instead of 24 co-sponsors, there are five on board.
The company hired to land sponsorship deals for the Games is Sports Marketing and Management (SMAM), based in Melbourne. Why SMAM was hired, and the terms offered, are now being scrutinized closely. For one thing, the bulk of sponsors on board so far are Public Service Units (PSUs) like the National Thermal Power Corporation. They've objected to any part of their money being handed over as commission to SMAM. In a statement issued on Thursday, the company clarified, "Following the recent decision to encourage sponsorships from PSUs as part of their corporate social responsibility activities, SMAM has, in the interest of helping Delhi stage successful Commonwealth Games, offered the OC to forego its right to the contracted remuneration amount on such sponsorship revenues. Instead SMAM will only charge a management service fee to cover the costs related to delivery and servicing of the sponsorship benefits. Like for all its clients, SMAM does not benefit in any way and is not remunerated on any grants or donations made by government."
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Read-CWG corruption row: Australian company denies allegations)
What may offend some is that whether or not SMAM lands advertisers, it seems entitled to a fee, even though there's a glaring absence of international advertisers - presumably what the company was meant to draw. SMAM's statement claims it "has generated record breaking sponsorship income totalling over Rs 400 crores (USD 85 million) so far. But apart from PSUs, sources say several major advertisers have struck deals directly with the Games' Organizing Committee.
SMAM has denied that it is being investigated by any government authority. It also says it has no connection to World Sports Group (WSG), a company being investigated for an 80-crore kickback in a controversial broadcast rights' deal for the Indian Premier League. The Inquiry Committee set up by Kalmadi is reportedly examining whether SMAM shares any DNA with World Sports Group.