PT Usha refutes CAG charges of favouring Reliance: ‘Assumption does not hold good’ | Sport-others News

Indian Olympic Association president PT Usha has refuted the Comptroller and Auditor General (CAG) of India’s charge of favouring Reliance Industries Limited (RIL). Usha’s 61-page response, dated October 8, comes after the CAG, though a notice last month, had pointed to IOA’s ‘loss of Rs 24 crore due to faulty agreement with RIL and undue favour to RIL”. The issue relates to a Rs 35 crore contract signed IOA with RIL to build a hospitality lounge at the Paris Olympics.In her response, the track and field legend, while stating the CAG’s ‘assumption does not hold good’, blamed the earlier adminration for its ‘flawed’ process. She has also requested the auditors to ‘settle’ the matter.
Her response includes a copy of the initial contract signed in 2022 and the internal correspondence between the officials from the International Olympic Committee, the IOA and RIL about the renegotiation of the Rs 35-crore deal.
India House deal
In July 2022, the IOA invited bids to build a ‘hospitality lounge’ on the sidelines of the Paris Games, where among other things India could lob for the hosting rights of the 2036 Olympics. Documents enclosed Usha as a part of her reply show that Reliance got the contract, which was enforced in July 2022 and signed on behalf of the IOA former Secretary General Rajiv Mehta.
As per the deal, Reliance would pay Rs 35 crore in instalments during the six years from 2022 to 2028. In return, the contract states that Reliance would get ‘exclusive naming rights’ to the India House and become the IOA’s ‘principal sponsor’ during the said period.
IOC’s objection
According to Usha, in June 2023, wrote an email stating: “…No NOC (National Olympic Committee) sponsor branding can be visible from the outside of your NOC House.” Usha has supplied a copy of the communication in her reply. The IOC’s rule meant Reliance could not enjoy the exclusive naming rights for the India House, as agreed in the initial contract.
Consequently, on September 7, 2023, Siddharth Shanker, Vice-President and Head of Reliance Foundation Sports, proposed revisions to the contract.In an email, Shanker sought a ‘reduction in the total rights fee 50 per cent’ — which Usha said would bring down the value of the contract from Rs 35 to Rs 17.5. Further, Shanker asked for modifications in how the revenue generated from the India House would be shared and proposed to ‘add applicable editions of Summer Youth Olympic Games (2026 and 2030)’ where Reliance would be ‘designated as a Principal Partner’.
Further, the email mentioned that ‘for any additional sponsor agreements executed Parties for India House, such additional sponsors shall be granted entitlements of Associate Sponsor of IOA, in addition to the India House rights’.
In other words, any company that paid just for the sponsorship of the India House would also be the IOA’s Associate Sponsor.
Usha said she was ‘alarmed’ at the ‘proposed terms of renegotiation RIL’ and ‘convened a meeting of RIL representatives and Mr. Rohit Rajpal (Chairman of the IOA’s Sponsorship Committee) on 20th September 2023 at Olympic Bhavan, New Delhi’.
Following negotiations that lasted a month, according to a mail trail, on October 20, 2023, it was ‘agreed that there would be no rights fee reduction and the IOA was able to salvage the deal’, Usha wrote.
According to the CAG documents, the sponsorship agreement was ‘amended’ and Reliance was made the IOA’s principal partner for the 2026 and 2030 Youth and Winter Olympics. The revised contract was signed in December 2023.
Auditors’ red flags
On September 12, 2024, the CAG’s audit team issued a memorandum to the IOA, titled: ‘Undue favour to the Company (RIL).
It observed that giving away sponsorship deals for the youth and winter events — in addition to the Commonwealth and Asian Games in 2022 and 2026 as well as the Paris and LA Olympics — led to a ‘loss of Rs 24 crore’ to the IOA. The amount was calculated on the basis that the IOA was to receive Rs 6 crore on average per Games from Reliance.
The CAG also pointed to the revenue-sharing clause. In the revised deal, Reliance promised to transfer the additional earnings from the India House after recouping the costs incurred in building the lounge.
The auditors asked Usha: “How many companies were engaged in Olympics 2024 with respect to Additional Rights Revenue RIL? The copies of the agreements may be furnished to audit signed with them RIL.”
The CAG also asked for ‘relevant files along with a copy of the accounts of the Company’ (Reliance).
Usha’s defence
Usha, in her reply on October 8, argued that unlike the CWG, Asian Games and Olympics, the Youth and Winter Olympics have ‘no meaningful media or public interest’. “Additionally, the size of the contingents and probability of winning medals at these events is very small compared to other Games such as CWG, AG (Asian Games) and OG (Olympic Games,” she wrote.
She added: “The calculation the CAG audit team assumes that each of the six events… would bring in uniform sum of Rs 6 crore per event to the IOA and therefore, additional four events should have also drawn in similar sums. As explained above, such an assumption does not hold good.”Usha pointed fingers at the earlier adminration, calling their tender process for the India House ‘flawed as it did not specify that the granting of naming rights… to a sponsor would be governed the IOC guidelines’.
She concluded: “In view of the details provided above, it is requested that the half margin maybe settled.”