CWG: Did Federation in London allow conflict of interest while awarding contracts?

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CWG: Did Federation in London allow conflict of interest while awarding contracts?

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New Delhi:  The allegations of mammoth corruption in the run-up to the Commonwealth Games are steadily scaling up to some of the senior-most men involved with organizing the event.  And they aren't all Indian.

First, an interim audit report suggested that expensive contracts had been awarded indiscriminately by Suresh Kalmadi, Chairman of the Organising Committee, Mike Fennell, the President of the Commonwealth Games Federation and Mike Hooper, CEO of the Commonwealth Games Federation.

Now, NDTV has unraveled a complicated trail of ownership that shows it   special favour sand contracts might have been given to man named Craig McLatchey, who was, till recently, a member of the Commonwealth Games Coordination Commission.

Originally from Australia, McLatchey is a resident of Switzerland, and is the sole owner of Event Knowledge Service (EKS), a company hired for 29 crores as a technical consultant for the Games, in partnership with financial consultants Ernst and Young. EKS has in the past worked on the Sydney Olympics and the Melbourne Commonwealth Games. An interim report of the Comptroller and Auditor General of India said the EKS deal was an example of "undue favours."

NDTV has accessed documents that show McLatchey is also a stake-holder in Sports Marketing and Management (SMAM), which, till recently, had a contract worth 230 crores to find sponsors and international advertisers for the Games.  SMAM was fired by Kalmadi earlier this month for "non-performance" - the Games have about 400 crores in sponsorship as against a target of more than 900 crores. Most of the sponsors are Indian Public Sector Units (PSUs) who made it clear that they would not be willing to foot the bill for any sort of commission for SMAM.

In a statement to NDTV, McLatchey has said that he had no connection with SMAM.  However, McLatchey owns 50 percent of Ithaca Private Limited, which in turn owns a super share or "F Class" stake in a firm named ERIS. Further down the food chain, ERIS owns 26 percent of SMAM Australia. McLatchey says his relationship with Bushell and SMAM is a personal one with no business dimension. (Read: McLatchey's statement)

"On any occasion where EKS representatives, including me, have considered that there was a potential for conflict between the parties (not necessarily a conflict of interest) we have advised both parties and excluded ourselves from any proceedings or deliberations," said Craig McLatchey.

SMAM, head-quartered in Melbourne, is owned by Mike Bushell, acknowledged by McLatchey as a close friend.  McLatchey is a former chief executive of the Australian Olympic Committee, while Bushell has been the marketing agent for major sports events including the Sydney Olympics.  

The coordination commission was set up by the Commonwealth Games Federation, based in London, and headed by Mike Hooper.

McLatchey attended meetings of this Commission in Delhi till May 2009.  Then, for reasons not clear, he stepped down.

Mike Hooper, the Chief Executive Officer of the Commonwealth Games Federation, told NDTV that McLatchey declared a conflict of interest before his EKS won a consulting contract for the Games.  He also said "due process" was followed. (Watch)

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