The glitzy event was attended by President Pratibha Patil, Queen Elizabeth II and a host of top Indian athletes and Organising Committee (OC) officials. The ED also named five OC officials apart from Kalmadi in its complaint -- former secretary general Lalit Bhanot, director general V K Verma, deputy director general Sanjay Mahindroo, joint director general (accounts and finance) M Jaychandran and A K Mattoo.
Kalmadi, according to agency`s complaint, was named for providing his signatures in his "individual capacity" and allowing "unauthorised payments" of more than Rs 8 crore and few others for the conduct of the QBR and also side-stepping five other service providers in favour of a firm -- AM Films and Cars limited.
The ED complaint also mentions how the OC violated its own charter for the event and hired luxury vehicles like Mercedes S-class, BMW-7 series thereby violating the authorisation for hiring only "mid-size" cars for ferrying guests, athletes and other dignitaries. According to the ED complaint, a London-based firm Jack Morton Worldwide (JMW) had made a clean bid for providing logistics for the QBR but it was overlooked in favour of AM films and Cars, and the deal also violated RBI regulations in this regard.
The RBI, according to ED, has rules which specify that any such state-sponsored event should be conducted after inviting global tenders from competent bidders, which was not done in this case. The ED complaint mentions a special case where the state-run ITDC and four other firms based in London were competent, with past experience of conducting such events, but they were not able to get a chance to organise the QBR as global tenders were not floated.
On the other hand, the favoured firm AM Films had no past experience of hosting video screens, installing logistics, designs, toilet facilities and first-aid which are an essential qualification to host events like QBR. The multiple-angle ED probe, which is part of the complaint, also allegedly found that few OC officials including Mahindroo misused the `debit cards` issued by the OC to them for transfer of funds in the conduct of the events of the 2010 Commonwealth Games.
The RBI compliance reports in this regard formed the basis of the ED charge sheet in the case, which is also being probed by the CBI for alleged corruption charges. Talking about 150 luxury cars used for the QBR, the agency`s probe found that the vehicles had clocked exorbitant miles during the time they were hired and the bills that were furnished in lieu of these services were not cleared by "authorised signatories".
Once the complaint is approved by the special director of the agency (adjudicating authority), notices will be issued to all those named and the ED can then penalise them 300 times of the actual illegal funds transfered, under the provisions of the Foreign Exchange Management Act (FEMA). ED`s probe, according to sources, relied heavily on the information provided by the RBI in this regard and other documents it has seized earlier from the OC.
A noting in the minutes of the meeting of the committee for evaluation of bids relating to the work of arranging display services as a part of crowd control measure during the QBR had provided vital leads to the agency. "The firm has asked for hundred per cent advanced payment and in view of the short time available and the risk of event cancellation, the committee (OC) recommends that the advance payment of hundred per cent may be given to the firm (AM Films) to facilitate taking up the work in time," the minutes had stated.
The sources said that violation under FEMA are related to the arrangements of this 100 per cent advance payment to A M Films. According to sources, the minutes of the meeting said that the committee "also expressed concerns on the vendor not willing to deliver services without payment and they indicated that if the vendor does not confirm to provide the display screens they would have no options but to cancel the QBR event" and hence the legal route was allegedly skipped to conduct the UK-based event. The agency also said the actual QBR event had instances of "over-invoicing" by A M Films and in some cases the rates were more than three-times higher than what was promised by another firm JMW.