Firm got more than sponsorship it brought

CYG : SMAM was paid Rs 2.68 crore for bringing in sponsorship of Rs 2.11 crore, says report

The Commonwealth Games Organising Committee which has terminated its contract with Sports Marketing and Management (SMAM) over alleged non-performance and inability to deliver sponsorship targets, states it did not pay a single rupee to the Australian company.

But SMAM, which had also been hired for bringing in sponsorship for the 2008 Pune Commonwealth Youth Games (CYG), the precursor to the Commonwealth Games, appears to have earned more commission than sponsorship it had raked in.

According to the interim inspection report of the Comptroller and Auditor General of India (CAG), during the Pune CYG, the OC received a total sponsorship of Rs 19.99 crore. Of this, public sector undertakings (PSUs) contributed Rs 17.88 crore or 89.45 per cent.

t was only the remaining sponsorship of Rs 2.11 crore that SMAM finally generated for CYG, but for that, the company was paid a commission of Rs 2.68 crore.

Though OC Secretary General Lalit Bhanot had earlier stated in New Delhi that no money was paid to SMAM, when contacted by The Indian Express on Tuesday, he conceded “a small amount was paid to the company” during CYG as per the contract.

He, however, refrained from confirming the amount, stating he did not have the requisite papers with him.

According to the contract, the company was to be paid a commission of 15 per cent of the total sponsorship it brought in. However, the sponsorship came mainly from PSUs like the Bank of Maharashtra, BSNL, HPCL and SAIL with the exception of Coca Cola which was the sole private sponsor.

Incidentally, the Finance Ministry decrees that no commission be paid for any contribution made by a public sector to any organization. The CAG is now apparently investigating why the OC signed up again with a firm that had failed to bring in sponsorship during the Pune games.

CYG merchandise worth Rs 24.5 lakh idle
The audit report prepared for the financial year ended March 31, 2009 by the Office of the Director General of Audit, Central Revenues, has noted that merchandising products of CYG-Pune 2008, costing Rs 124.04 lakh, were distributed but products costing Rs 24.55 lakh were left as idle stock, which had no resale value. “I believe later some part of this was auctioned to cover the loss,” added Anil Sharma of A Sharma and Co. the Delhi-based chartered accountants that conducted the audit.

Also listing under irregularities, the report states that Rs 2.02 crore was spent on sponsorship “which was out of the scope of sponsorship agreements” and an expenditure of Rs 52.83 lakh was made on hiking pay and allowances of employees of CYG, Pune.