COMMONWEALTH GAMES

SCAM

PRESENTED BY:
AKHIL GUPTA (91064)
DEEPAK NEGI (91077)
MD. WASI (91091)
SOMSHUBHRA PAL (91110)
SUBHRAJIT DUTT (91112)
SUMIT CHANDAK (91114)
BACKGROUND

 A sporting competition bringing together the members of

the British Empire was first proposed in 1891

 The first Games were held in 1930 in Canada.

 The name was changed to British Empire and

Commonwealth Games in 1954, to British Commonwealth
Games in 1970 and assumed the current name of the
Commonwealth Games in 1978.

 It involves athletes from Common Wealth of Nations.

Contd…
 The 2010 Commonwealth Games were the nineteenth
Commonwealth Games

 The Games were held in Delhi, India between 3 October and

14 October 2010.

 The largest multi-sport event conducted to date in Delhi and

India

 The opening ceremony took place at the Jawaharlal Nehru

Stadium in Delhi.
WHEN DID INDIA BID FOR IT
 The two principal bids for the 2010 CWG were from Delhi, India and
Hamilton, Ontario, Canada.

 A ballot was held in November 2003 at the CWG Federation General

Assembly in Montego Bay, Jamaica.

 Delhi won by a margin of 46 votes to 22, confirming India's first

successful bid for the Games.

 India shifted the balance in its favor in the second round of voting with a
promise that it would provide US$100,000 to each participating
country, along with air tickets, boarding, lodging and transport.

 The successful 2003 Afro-Asian Games in Hyderabad showed India had

the resources, infrastructure and technical know-how to stage a big
sporting event.
BUDGET
 The total budget estimated for hosting the Games is US$
1.6 billion and this amount excluded non-sports-related
infrastructure development in the city like airports, roads
and other structures.

 This made the 2010 Commonwealth Games the most

expensive Commonwealth Games ever, being larger than the
previous games in Melbourne 2006 (approx. US$ 1.1 billion).
A BRIEF LOOK
MARCH
 Mike Fennell, Chief of Common Games Federation (CGF) told everything
in Delhi would be fantastic during the commencement of CWG.

APRIL
 MCD anticipated giving temporary licenses to illicit hotels and guest
houses in Delhi in the run up to the CWG.

 CWG, the Budget within a period of 4 yrs increased by more than 40 % 

 The construction work under the scanner, yet once again it has come into
notice that out of ten stadiums only five have been completely ready
while the remaining are yet far from finishing line.
Contd…
MAY
 Renovation of Capital’s Newest Airport Terminal by Hong Kong Firm Landscaping.

JUNE
 A major scam took place regarding the funds of CWG.

 During the transfer of funds into development for the CWG, it was reported that around
450,000 pounds were transferred to a British company from the Commonwealth account to
that company

 CWG project causing trouble amongst government members

 Mani Shankar Aiyar comments “I am very happy with the rains, firstly because it will ensure
a good agriculture for the country and secondly because it will ensure that the CWG are
spoilt.” The reason he stated for this point of view was that he wanted the huge investment
of Rs. 35,000 crore that was done for organizing these games to be instead reverted onto
the children in India who would have instead won laurels for the country at such
international events.
Contd…
JULY
 Jawaharlal Nehru Stadium prepared for Commonwealth Games India.
 Huge sum of money, around Rs 961 crore has been spent for the
development of the stadium
Contd…

AUGUST
 Commonwealth games face security issues according to the
New Zealand diplomats.

 A.R. Rehman composes the CWG at an exorbitant price of 10

Crore. The song is a huge flop among people.

 The dead line for clearing the debris is extended to August 31

from the initially circulated August 10.
Contd…
SEPTEMBER
 Australian government stands up to defend the incomplete preparations and
Indian government.
 Commonwealth Games in a state of Gloom for New Zealand.
 Many participating athletes back-out from the Commonwealth games 2010.
 Rehman Comes with improved version of new CWG Theme Song
 Tourists from Taiwan attacked.
 Only 16 days left to CWG: Bridge collapses at JNL
 False ceiling carves out at CWG stadium.
 Commonwealth Games federation president annoyed with the games village
preparations
BUSINESS ETHICS DEFINED
 Institute of Business Ethics, London defines it as

– “Business ethics is the application of ethical values to business

behavior. It applies to any and all aspects of business conduct,
from boardroom strategies and how companies treat their
employees and suppliers to sales techniques and accounting
practices. Ethics goes beyond the legal requirements for a
company and is, therefore, about discretionary decisions and
behavior guided by values. Business ethics is relevant both to
the conduct of individuals and to the conduct of the
organization as a whole.”
MORAL RESPONSIBILITY
 A person is morally responsible for any wrong it:

 Person caused or helped cause it, or failed to prevent it

when he could and should have;

 Person did so knowingly what he or she was doing

 Person did so of his own free will

ROLE PLAYERS
Sports
GNCT-Delhi
Authority
Govt
Of India
ORGANISING COMMITTEE
• Suresh Kalmadi (Chairman)
• Lalit Bhanot (Secretary General)
Vendors
CAG • T.S. Darbari
• Sanjay Mohindro
• M. Jayachandran

Delhi
PMO
Development
Authority
Consultants
CIVIC BODIES INVOLVED

 Sports Authority Of India(for building sports

infrastructure) – Rs. 2904.86cr

 Organising Committee(for conducting games) –

Rs.1620cr

 Delhi Development Authority(for Games Village) –

Rs. 827.85cr

 GNCT-Delhi Govt(Civic Infrastructure) – Rs. 2800cr

The CWG or infamously ‘Corruption
Wali Games’
 Name first appeared in Times of India in an article by
author Chetan Bhagat.

 Estimated scam of Rs. 70,000 – 80,000 crores.

 Matter of national shame

CIVIC BODIES PROBING THE SCAM

 A panel set up by the government to look into the corruption

charges. Headed by former Comptroller and Auditor General,
VK Shunglu, it has the mandate to review every transaction

 The special panel appointed by the government will probe

the financial bungling and administrative lapses.

 The Comptroller and Auditor. General (CAG) is looking into

financial misappropriation

 Enforcement Directorate (ED) is probing the routing of

funds, which have been traced to tax havens like Mauritius.
Contd…
 The Central Bureau of Investigation (CBI) will be examining
tenders issued for various Games related projects, which are
already under scrutiny after exposes on items being bought
at absurdly inflated rates.

 The Central Vigilance Commission (CVC) is looking into

allegations of corruption in all infrastructure projects like the
stadia and Games' venues.
SURESH KALMADI-The criminal or the
victim?

 First Afro Asian Games in 2003 in Hyderabad, India

 Organizing the Pune International Marathon for the last 23 years

 Successfully launched the Asian Grand Prix Athletic meet in 1990 which
are conducted every year. At the Youth Games India topped the Medal
Tally with 76 Medals including 33 gold.

 As IOA President, organized National Games at Pune, Bangalore,

Chandigarh, Hyderabad, Manipur, Guwahati and over 1000 crores work of
Olympic infrastructure in the county.

 Organizer of the World Half Marathon in 2004 at Delhi

 Successful organization of the III Commonwealth Youth Games 2008 at

Pune
SURESH KALMADI-The criminal or the
victim?
 Suresh Kalmadi, the Chairman of CWG Organizing
Committee.

 On Friday, Aug 6, refused to resign over allegations of

corruption in the preparation for Games.

 While addressing the media in New Delhi, Kalmadi said, "I

will quit only if the Prime Minister asks me to. Everything is
on schedule and we will deliver the Games."
ALLEGATIONS

1. It is estimated that the expenditure bills have been

inflated by 30% of the actual value of services or
commodities procured.

2. The Income Tax department is scrutinizing financial

documents relating to the broadcast rights for the
CWG following charges of tax evasion
Contd…

3. The Central Vigilance Commission is examining 11

major project tenders which were awarded at
artificially hiked rates causing a loss of over Rs.500
crore.

4. The Enforcement Directorate is looking into a case

of alleged violation for foreign exchange regulations
related to the Queen Baton Relay in London.
Contd…

5. Infrastructure developer Emaar-MGF is in the dock for

alleged irregularities in the construction of the CWG Village
in Delhi. The Rs.183 crore bank guarantee furnished by
Commonwealth Games village builder Emaar-MGF was
ordered to be confiscated on charges of irregularities. A
Rs. 760 crore bail out package given by Delhi Development
Authority(DDA) for Emaar-MGF also came under the
scanner.

6. The CWG Organizing Committee head office being

burglarized several times to steal or destruct the data which
is being probed.
Contd…

7. The Central Vigilance Commission has initiated an inquiry into

an alleged recruitment scam in the Commonwealth Games
Organizing Committee (OC) following complaints that it
showed ghost employees on its muster rolls and violated
norms while inducting people. A total of 2,100 people were
shown as having worked between May 2009 and November
2010 in different capacities and together drew salary running
into several crores.

8. Kalmadi delayed catering contract in CWG which inflated the

budget by more than Rs 20 cr.
Contd…

9. The CVC has found alleged financial and administrative

irregularities in over 30 Commonwealth Games projects in
the national capital and overlays deals by the Organiszng
Committee for the mega-sporting event.
 
10. CBI registered the fourth FIR in connection with the overlays
contracts given out to four firms. The total value of these
contracts was over Rs 600 crore.
THE MURKY DEAL….

 The lawn bowling tracks to be used during the Games had been built at
around Rs 1.36 crore when it could had been done at just Rs 27 lakh.
BROKEN ROADS

 There were a number of teenagers between the ages of 14 and 16 who

worked at these places, obviously lured by an adult salary.
PMO IN THE NEWS DURING ALLEGED
CWG CORRUPTION SCAM
 The Bharatiya Janata Party blamed the PMO and the union
cabinet for not verifying the costs before approving the
‘inflated budget’

 The BJP president, Nitin Gadkari mentioned that out of the

Rs 70000 crore spent, only Rs 350 crore was spent on Indian
sportspersons.

 Another big question asked by BJP president was how the

total budget for staging the games escalated by a huge
percent and why didn’t the PMO or Dr. Manmohan Singh
himself ask questions?
DYNAMISM INVOLVED
From the perspective of purchasing process, the following control issues
are apparent:

 Improper and inadequate vendor selection and evaluation

procedures were followed.  

 Conflict of interest was not disclosed while signing contracts with

related parties.

 Tenders were not given to bidders quoting lowest price of the product.

 Vendors did not deliver the contracted quality and quantity as per the
delivery schedule.
DYNAMISM INVOLVED
 Vendor payments were not linked to delivery of products or
completion of deliverables.

 There was no segregation of duties. The same officials

authorized the contract and approved payments.

 Vendors were not penalized for sub-standard quality or late

delivery.
DYNAMISM INVOLVED
 Purchase contracts signed with varying rates for the same
product;

 Prices over-inflated in some contracts;

 Contracts given to relatives and friends;

 Sub-standard products purchased;

 Vendor payments made without confirming quality and delivery;

 Payments made to non-existent vendors.

DYNAMISM INVOLVED
 An independent evaluation of contracts by risk managers
may have prevented misappropriation of funds.

 A periodic audit by government agencies could have

highlighted these issues at an earlier stage

 Consultants Event Knowledge Services, Fast Track Sales Ltd,

Sports Marketing And Management (SMAM) and AM Films
are supposed to have received undue benefits
 Legal Requirements to place report in parliament
 WHERE COMES THE MORAL
RESPONSIBILITY
 The organization committee members ignored the Prevention of
Corruption Act and government procedures for contracts and tenders

 Indicates  misutilization of public funds.

 PMO silent and unobservant

 Mr. Lalit Bhanot, SCG of OC: “some false ceiling has fallen down, which
means nothing,” and “these things happen even at your house.”

 Government has “urged” public sector units to shell out, CSR investments

 Diversion of Funds : Scheduled Caste Sub Plan;  100,000 poor slum-

dwellers evicted.
CONSEQUENCES
 Bad publicity of the nation.

 Tarnished image in terms of hygiene.

 Loss of faith in the system

 Refusal of athletes to participate in games or withdraw from

games.

 The incomplete work added unnecessary cost burdens

Contd…
 Unnecessary laundering of tax payers money

 India perceived as more corrupt after CWG scam – 87th out of

178 countries surveyed

 A marginal decline in India's integrity score to 3.3 in 2010

from 3.5 in 2007 and 3.4 in 2008 and 2009

 Innocent employees at the OC still waiting for their salaries

EFFECT ON BRAND INDIA
 Unique opportunity lost??

 Take a look at our neighbors – Beijing Olympics

 Looting of pride of our nation; leaving us to shambles

 India’s position degraded in global list of corruption

WE DON’T REQUIRE PARASITES BUT
LEADERS

mera desh mahan, yahan sab kuch

bikta hai, insaniyat bikti hai,iman
bikta hai, pyar bikta hai, admi bikta
hai. aurat bikti hai  aur phir kya
bachta hai
WHAT LED TO THIS?

• Presence of avenues for corruption

• Lack of Accountabilty

• Psyche of citizenry to believe that corruption is ‘normal’

• All praise for the Indian ‘jugaad’

COULD THIS HAVE BEEN AVOIDED?

• An independent evaluation of contracts by risk managers

• Periodic audits by CAG

• Hand it over to the Private Companies

SUGGESTIONS
 “ the scheme of fighting against systemic corruption comprises
a global fostering of democratic ethos, universal ideology of
public service, and public ethics, education and training”
-Gerald Caidin

 The contagious disease of scams demands perfect healing

and a thorough clean-up

 Implementation of The Santhanam Committee

recommendations
Contd…
The Santhanam Committee emphasized four major causes of
corruption :

 Administrative delays

 Government taking upon themselves more than what they can

manage by way of regulatory functions.

 Scope for personal discretion in the exercise of powers vested in

different categories of government servants.

 Cumbersome procedures of dealing with various matters which

are of importance of citizens in their day to day affairs
RECOMMENDATION FOR
ADMINISTRATIVE DELAYS
 Review of existing procedures and practices to find out the
points at which delay occurs and device suitable steps to
minimise

 Prescribe definite time-limits for dealing with receipts, files

etc., which should be strictly enforced
RECOMMENDATION FOR
SECOND CAUSE
 Each Ministry/Department should undertake a review of the
regulatory functions which are its responsibility, with a view
to see whether all of them are strictly necessary and whether
the manner of discharge of these functions and of the
exercise of powers of control are capable of improvement
RECOMMENDATION FOR THIRD
CAUSE
 Adequate methods of control should be devised over
exercise of discretion.

 The right to act according to discretion does not mean right

to act arbitrarily.

 The fairness of the method by which the discretionary

decision was arrived at may certainly be looked into
RECOMMENDATION FOR FOURTH
CAUSE
 Citizens should be educate properly with regard to the
procedures of dealing with various matters

 They should also be provided with an easy access to

administration at various level without the need for the
intervention of touts and intermediaries
LEARNINGS FOR YOUNG LEADERS

 Businesses should be governed by

establishing a strict Code of Conduct
 Commitment should come from top management
 Preparation of the Plan Document should be done well in advance
 The implementation strategy should be developed
 Complaints should be handled effectively
 Corrective action must be taken
 Commitment to ethical values must be evaluated
 The Contract must be reviewed and updated annually
Contd…

 The leaders should take strict action against

corruption, dishonest behavior and
manipulation being carried out in the
organization

 The leaders should take care of the interests of all

the Stakeholders involved

 The leaders should take an inside-out view of the

problem and stop blaming others
 THANK YOU

BEFORE AFTER
CWG CWG