Lawsuits filed against two UK firms as Delhi Games investigated

Published on Monday 15 November 2010 15:47

Indian investigators last night filed lawsuits against two London-based companies over alleged corruption involving the Commonwealth Games, and arrested two former officials from the 2010 event's organising committee.

The two companies named in the suits had been contracted to work during the Queen's Baton Relay launching ceremony in London, held a year before the 3-14 October Games in Delhi.

India had hoped the Games would boost its world reputation, but they instead became a source of embarrassment amid allegations of sleaze, construction delays and cost overruns.

The London event accounts for only a few of the many contracts now being reviewed in a multi-pronged investigation.

After the estimated 255 million price tag for the Games ballooned to around 9 billion, the opposition Bharatiya Janata Party alleged millions were siphoned by companies run by relatives of games officials.

Seeking to distance itself from the scandals, India's ruling Congress Party last week fired the committee head, Suresh Kalmadi, as the party's parliament secretary.

But Mr Kalmadi keeps his committee position while the investigations continue.

The allegations of funding irregularities during the London event, however, emerged earlier this year and led to the firing of the Games' organising committee joint director TS Darbari and deputy director Sanjay Mahendroo. On Monday, the two were taken into custody.

A few hours earlier, the Central Bureau of Investigation filed lawsuits in a Delhi court against A M Car-Van Hire Ltd and A M Films, bureau spokesman R K Gaur said. An arrest warrant was issued for the director of the companies.

The companies and the director are accused of cheating, conspiracy and abuse of office, according to a statement by the Bureau of Investigation.

It said organising committee officials colluded with the London-based firms to award work "at exorbitant rates" that were justified through forged documents or false price quotes.

"The accused persons caused huge loss to the government of India and corresponding wrongful gain to the accused firms," the statement said.

Authorities also searched the two officials' homes and the organising committee's office."Incriminating documents recovered during searches are being scrutinised," the statement said.

It remained unclear last night when the cases might go to a court hearing.

Meanwhile, Indian telecommunications minister Andimuthu Raja resigned yesterday amid allegations his handling of the 2008 sale of licences for cell phone airwaves resulted in massive losses for the government.

Mr Raja, who belongs to a southern Indian political party that is a key ally of Prime Minister Manmohan Singh's Congress Party, came under heavy pressure to resign after a government inquiry reportedly alleged that the sale of second generation, or 2G, wireless spectrum had resulted in a 1.76 trillion rupees (24bn) loss to the treasury.

Critics claim that Mr Raja's allocation of 2G spectrum licences was improperly based on 2001 prices and that he unfairly awarded licences on a "first come, first served" basis, rather than by auction.