PMLA

Role of ED in Commonwealth Games Scam

Commonwealth Games are an international sports event held between the commonwealth nations every fourth year. It was first conducted in 1930, and now it has become the third-largest sports event on a global level. It is governed by the Commonwealth Games Federation. 

The Commonwealth Games Scam was committed in 2010 when the 19th Commonwealth Games were held in India at New Delhi. A fraud of a considerable amount of 70000 crores was done from the funds provided for conducting the Commonwealth sports events.  

The Commonwealth Games Scam

Commonwealth Games Scam is one of the biggest scams in India, where an astonishing amount of 70,000 crores were embezzled. Central Vigilance Commission informed that Mr Suresh Kalmadi, then Lok Sabha MP, Chairman of Organising Committee of games and President of Commonwealth Games 2010, is behind this Commonwealth Games Scam. 

After the completion of the event, many complaints related to dirty quarters, leaky walls, building not entirely constructed, inflation, dengue, etc., were reported, and it was seen as a part of the fraud. Only half of the allotted amounts were spent on the Indian players. They were moved to shabby flats from the allocated flats. And for this Commonwealth Games Scam, the names of many prominent businessmen and politicians were in question. All suspects were charged with criminal conspiracy, theft and other provisions of the Prevention of Corruption Act 1988^[1].   

Central Vigilance Commission and CBI were in charge of investigating the matter related to the Commonwealth Games scam. And CBI arrested Suresh Kalmadi on 25th April 2011 in timing-scoring-result, and on 20th May, it filed the chargesheet against him in a special CBI court. He was charge-sheeted for offences like cheating and criminal conspiracy under IPC. There were more people named in the charge sheet along with Kalmadi. CBI mentioned the name of two firms also in the chargesheet filed in the case of the Commonwealth Games scam. Kalmadi awarded inflated game contracts, one worth Rs. 141 crores to Swiss Timing which was exceeded by Rs. 95 crores. 

The CBI, during the investigation, also charged other persons related to the Organising Committee of Commonwealth games, namely Lalit Bhanot, former executive; V K Verma, former director-general; ASV Prasad, joint director general; Surjit Lal, deputy director-general and money dealer M Jayachandran, A K Reddy, A K Madan, etc. The two firms involved in the Commonwealth Games scam were Swiss Temporal Order and AKR constructions. All the accused, including Kalmadi was charged with forgery, cheating, criminal conspiracy and using solid documents under IPC 1860 and provisions of the Prevention of Corruption Act 1988. 

ED’s role in Commonwealth Games Scam 

ED investigated and tracked the flow of funds related to the Commonwealth Games scam with the help of the RBI.

The ED investigated the flow of forex and funds during the Queens Baton Relay conducted in London before the Commonwealth Games. ED registered the case under FEMA after the British authorities referred to India that the hiring of London based transport firm AM Cars and Vans had been done at a very high price, and also an exorbitant payment had been made to the AM Films for installing video screens at Queens Baton Relay’s venue. The CBI team also visited London to obtain valuable information related to irregularities in Queens Baton Relay. 

ED recorded statements of Suresh Kalmadi and two other officers, AV Prasad and Surjit Lal of the Organising Committee at Tihar Jail in June 2011 on the case related to Commonwealth Games scam under the PMLA; they were arrested on 25th April 2011 by the CBI. ED questioned Kalmadi about his investments and transactions, primarily focused on foreign travel and foreign currencies. ED registered five different cases related to this scam under the said Act. Under the Foreign Exchange Management Act, ED also issued a notice to Kalmadi for disclosing the detailed information of his bank accounts, total investments, including movable and immovable properties, foreign exchange transactions, and international travel details since 2005. The notice was for summoning and questioning Mr Kalmadi by the ED in the matters related to Commonwealth Games scam. 

ED also questioned other people who were involved in the Commonwealth Games scam. Some of them were M Jayachandran, T S Darbari, V K Verma and Sanjay Mohindro. 

In 2012, ED filed the first chargesheet in the Commonwealth Games Scam and foreign exchange violation at Queens Baton Relay held in 2009 in London by the same sacked chairman and other officers of the Organising Committee of Commonwealth Games. In its chargesheet ED alleged that the irregularities were about Rs. 5 crores under FEMA, but some other illegal transactions related to forex contravention can lead to RS 12-13 crores. 

ED, during its investigation, found out that about 1.2 crores had been paid to A M Cars and Vans limited of London in an illegal way showing hiring for services, but the excessive payment was in contravention to RBI regulations. So, ED gave a clean chit to T S Darbari because it came to know that there was no evidence against him, and the payment was made without taking his approval after investigating the Commonwealth Games scam and saying that he was falsely accused of the same. 

ED also slapped a charge of 4.64 crores against Kalmadi and others accused of Commonwealth Games scam for the foreign exchange violation in the matter related to Queens Baton Relay. They have violated the RBI norms and also forex transactions. 

ED attached a total of 11.28 crores assets of Hyderabad based AKR construction firm related to money laundering in connection with Commonwealth Games scam in the year 2018; after investigating that the AKR Construction was paid 11.28 crores under a contract for construction. Then AKR Construction, under the guidance of its owner AK Reddy issued fake bills for labour contracts, supply of cables and more and then siphoned the amount and thus committed an offence of money laundering, said the ED. 

Again in 2019 that is after nine years of the Commonwealth Games Scam, ED has attached total assets of 94 lakh of a company, Raja Aederi Consultants Private Limited, which was involved in the scam, under the Prevention of Money Laundering Act. ED booked the company and its director Uday Shankar Bhat on the basis of an FIR lodged by CBI and filed a chargesheet for corruption under the PMLA. 

Conclusion

The Commonwealth Games Scam was done in 2010, where 70,000 crores were embezzled. This scam was investigated by various government organisations, including CAG, CVC, CBI, ED and RBI. The former Prime Minister, Hon’ble Manmohan Singh, also formed a committee to investigate the matter. The ED acted based on the CBI FIR, and it investigated the whole matter of the Commonwealth Games scam with the Reserve Bank of India. The main accused charge-sheeted by CBI and ED was Suresh Kalmadi. Around ten more people and two firms were associated with this scam apart from the main accused. ED has so far investigated and attached many assets concerning the Commonwealth Games Scam from the properties and assets of different firms who were found to have participated in the Commonwealth Games Scam.

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