ED smells a rat, probes 2 more foreign payouts

The Enforcement Directorate (ED) is investigating money paid by Commonwealth Games 2010 organisers to Switzerland-based Event Knowledge Services (EKS) and an Australian company, Sports Marketing And Management (SMAM), as it’s suspecting money laundering.

For the Youth Games held in Pune earlier this year, the Australian firm had been paid a 15% cut on an estimated sponsorship of $30 million, though almost all the money had been generated from Indian PSUs, including BSNL and SAIL. The sole private sponsor was Coca-Cola .

For CWG 2010, the Australian firm was to get up to 23% commission from revenue being generated from PSUs such as the Railways (Rs 100 crore), Central Bank, NTPC and Air India all pledging Rs 50 crore each.

Interestingly, as per the OC’s contract with SMAM, even though Air India has promised sponsorship in kind by way of providing air tickets equivalent to the pledged amount, the OC on its part will pay SMAM the commission in cash.

EKS has hired Ernst & Young in India to deliver on its obligations to the CWG. As per the contract, its services were to be available only till April 1, 2010 — a good six months before the Games are to begin.

TOI contacted both CWG spokesperson Lalit Bhanot and its public relations wing for a comment as also WSG’s India representative Harish Krishnamachar. Both refused to respond to the queries. Krishnamachar said it was not appropriate for him to answer any query at this juncture. A detailed questionnaire sent to him over email on his request also remained unanswered. Bhanot did not take calls, while the CWG’s PR wing promised to get back but did not do so.