This Article is From Oct 29, 2010

CWG corruption: Broadcast deal shows glitches

CWG corruption: Broadcast deal shows glitches
New Delhi: The inquest of the broadcast rights deal for the Commonwealth Games reveals a financial bending of the rules that has become a pattern for virtually every aspect of the event.

NDTV has been reporting over the last week that the Rs 246-crore deal is being cross-checked now by, among others, Income Tax officials. Sources say that they have uncovered evidence of violations that include foreign exchange laws.

The contract was awarded in March to SIS Interactive whose parent company is based in the UK. On the same day, SIS signed a deal sub-contracting the work to another company in Delhi. The SIS deal was handled by the Prasar Bharati, which governs Doordarshan and All India Radio, and reports to the Information and Broadcasting Ministry. The Ministry contends that it signed off on the original contract which was later amended dramatically by representatives of the Prasar Bharati.

The modified deal allowed SIS to outsource its work to a Delhi-based based company named Zoom Communications. Of the Rs 246 crore, close to Rs 177 crore were paid to Zoom. The money was paid  by India in dollars to the SIS parent company, which then paid Zoom. Without exporting any services, therefore, Zoom was paid in foreign exchange.

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In addition to alleged foreign exchange violations, Zoom is also being investigated for whether it used this circuitous international to underpay taxes.

CWG Broadcast Deal: Unanswered Questions

  • Was SIS Live's Indian entity a shell-company?
  • Were contract clauses changed to suit SIS?
  • Were tough contract clauses made to discourage bidders?
  • Who benefited from the deal?