New Delhi August 3:
            Switzerland-based Event Knowledge Services (EKS) and an Australian company, Sports Marketing And Management (SMAM), based in Melbourne, have now come under investigation of the Enforcement Directorate, which is trailing the money paid to these two companies by the organizers of the Commonwealth Games. Already, payments of more than Rs 50 crore have been made to these two firms.
Sources said the linkages of SMAM with the Mauritius-based World Sports Group (WSG) have raised suspicions of money laundering, as the latter was the beneficiary of the Rs 380 crore "facilitation fee" made in IPLgate and is still under the scanner of several agencies in India. The investigating agencies are also examining whether it is just a coincidence that the CEO of EKS, which was hired by the CWG organizers ostensibly to provide know-how on how to conduct the Games, Craig McLatchey, is also a member of the Commonwealth Games Federation. The CGF is to Commonwealth Games what the International Olympic Committee is to the Olympics.
Interestingly, though the CGF had made some adverse comments last year on the state of preparations for CWG 2010, it changed its tune after its team visited to New Delhi in October 2009. Despite most of the Games infrastructure being in a nascent stage then, the CGF team left after giving an "all is well" certificate to organizers.
The ED is also probing the shareholding pattern of the Singapore subsidiary of SMAM, which had bagged the CWG contract for getting sponsorship for the Games. For this, the Organising Committee had promised to pay them up to 23% commission. The Australian firm had a contractual obligation to get worldwide advertisements and sponsorships worth $100 million.
An initial probe has revealed that SMAM has so far failed to get any advertisements, besides those pledged by Indian PSUs. This is not the first time that SMAM has come under a cloud for its failure to deliver on its contractual obligations. In the Commonwealth Youth Games 2008 in Pune, the Suresh Kalmadi-led organizing committee had hired the same firm for sponsorship and advertisements.
For the Youth Games, 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.
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.